# Gavin Andresen
# 2010-10-22 12:22:15
# https://bitcointalk.org/index.php?topic=1471.msg18051#msg18051

I suspect (but am far from certain) that a couple of psychological factors in the average human mind makes deflation worse than inflation. @p{par}

First, we've got an irrational attachment to "free" (see the book Predictably Irrational for experiments that show this).  If money is deflating, I can just let it sit under my mattress for "free" @p{--} and that might be more attractive to me even though I'd get a better return by investing it.  Investing ALWAYS looks like it costs something (brokerage commissions or lawyers fees or...). @p{par}

And second, we've got an irrational aversion to loss and an irrational attachment to stuff that we own.  Investment means opening yourself up to the possiblity of loss AND lending out something you own; I think a little bit of inflation helps overcome that irrationality, by building in a little loss if you stick your money under your mattress. @p{par}

I wonder if somebody could devise a small-scale experiment to figure out if deflation is bad for investment, and/or measure the size of the effect... @p{brk}