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Mental Accounting and the Absent-minded Driver

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Decision-Making and Behavioral Economics Financial Literacy, Pension, Retirement Analysis Financial Literacy and Behavior

Abstract

Abstract The term ‘mental accounting’ refers to a variety of phenomena in which money is non-fungible. Since the pioneering works of Kahneman, Tversky, and Thaler (Kahneman and Tversky, 1979, 1984; Tversky and Kahneman, 1981; and Thaler, 1980, 1985) it has become abundantly clear that people do not treat all dollars alike. Rather, people manage different accounts in their minds, in which money has origins and goals that cannot be ignored when this money is spent.

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References

1988Prospect theory: An analysis of decision under risk 1981The Framing of Decisions and the Psychology of Choice 1980Toward a positive theory of consumer choice 2013Choices, Values, and Frames 2008Mental Accounting and Consumer Choice 1992Picoeconomics: The Strategic Interaction of Successive Motivational States within the Person 1997On the Interpretation of Decision Problems with Imperfect Recall 1994Towards a theory of self restraint

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