If you've not read either of Morgan Housel's books (Psychology of Money and Same as Ever), I'd suggest picking them up.

There's got to be a bit of the psychology of winning the bidding war going on here.

Right off that bat you should know it's BS, because when they use psychology, hyperbolic labeling to make your brain ASSUME a fact, that's when ya know you gotta read the details. 

Had they just sold the property they were psychologically "stuck in", and re-invested, they could have recovered with a 100%+ gain instead of a 50%+.Anways, I don't actually think this is a good strategy for everyone.

So it's really just psychological comfort vs math. 

This "horrible experience" (she listened to a neighbor's story and presumably heard fake moans and groans through a wall, maybe some dirty, dirty talk) is clearly causing her immense psychological harm.Come on, Jimmy, let's get to the beef.

While people will almost certainly go above asking, there is likely a psychological effect by setting a price.

Plans changed, as they do very often with young people, and my interest turned completely away from the military to psychology.

Psychology, risk tolerance and self-discipline are involved. 

Since we're ten pages into this thread it may be safe to show a little book-learning and mention cross-cultural psychology and Geert Hofstede.