The New York Times once headlined that Tesla "has something hotter than cars to sell: its story". Narratives and Valuations, a new study co-authored by celebrated behavioural economist George Loewenstein, suggests we are indeed swayed by stories.

In two online experiments, participants either told the story of an item they owned (a mug, a hat) or listed its characteristics. Afterwards, they were given an opportunity to sell these items.

The story group asked for substantially higher prices; the average increase was 33 per cent. Unwillingness to sell rates were 78 per cent higher.

Stories matter, says Liberum strategist and blogger Joachim Klement. If a good story causes the value of a simple hat or mug to spike, he says, then you can imagine what it does to stocks and houses.