Mental Accounting and Consumer Choice¶
Thaler, R. (1985). Mental Accounting and Consumer Choice. Marketing Science, 4(3), 199-214.
Cited by¶
2 citations across 2 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Sunk Cost and Irreversible Commitment
- It also enables reasoning about Optionality: decisions made with knowledge of sunk-cost effects should preserve exit options and avoid irreversible commitment, reducing the magnitude of sunk costs that accumulate over time, a treatment Thaler (1985) develops within his mental-accounting framework for transaction utility and bygones.
This sourceDevelops mental-accounting model in which transactions are evaluated in segregated accounts; provides framework for reasoning about commitment, flexibility, and the optionality value of avoiding sunk-cost lock-in.
Supported in partVerified against the publisher's abstract
Thaler (1985) supplies the mental-accounting/transaction-utility frame the sentence names, but its abstract shows no treatment of optionality, exit options, irreversible commitment, or bygones.
“Then the evaluation of purchases is modeled using the new concept of “transaction utility.””
- It also enables reasoning about Optionality: decisions made with knowledge of sunk-cost effects should preserve exit options and avoid irreversible commitment, reducing the magnitude of sunk costs that accumulate over time, a treatment Thaler (1985) develops within his mental-accounting framework for transaction utility and bygones.
Mechanisms¶
- Core/Future Budget Buckets
- This is the shadow side of mental accounting — the same partitioning that protects a fund also makes it irrational to move money that clearly should move.
This sourceModels mental accounting as household budgeting that partitions resources into accounts and can produce economically nonfungible, choice-distorting allocations.
- This is the shadow side of mental accounting — the same partitioning that protects a fund also makes it irrational to move money that clearly should move.
Verification¶
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