The idea that people make decisions about money in some sort of laboratory setting is of course ridiculous. Markets provide information that aren't available in the lab. Vernon Smith is I think been very eloquent and correct on this, but carry on. Sorry. Yeah, he'll just give you another example of some of these studies. One of the so called cognitive illusion is called the conjunction fallacy. So the idea is that some some event cannot be more likely at the same event and another event together.
Psychologist and author Gerd Gigerenzer of the Max Planck Institute for Human Development talks about his book Gut Feelings with EconTalk host Russ Roberts. Gigerenzer argues for the power of simple heuristics--rules of thumb--over more complex models when making real-world decisions. He argues that many results in behavioral economics that appear irrational can be understood as sensible ways of coping with complexity.