PSYC11H3 Lecture Notes - Lecture 9: Mental Accounting, Fungibility, Bracketing
Document Summary
Example: which is better: gift certificate to a fancy restaurant that the recipient will enjoy or in cash, people say cash but it is non-restrictive, the recipient can spend it on. Money has labels whatever they want: those labels affect spending, saving, outcome evaluation and decision making, budgets, bracketing, open vs closed accounts. Example: imagine that you decide to see a play where admission is per ticket, as you enter you lost the bill: would you still pay for a ticket, 75% said yes. Organizations and households often establish non fungible budgets. Because budgets are nonfungible, one dept. /account may be severely constrained while another may be desperately looking to spend checking vs. savings. What are some things people hate paying for: promotion offering people freedom from paying a fee that they hate will probably be more effective than a different but monetarily equivalent promotion.
