mental accounting
/ˌmentəl əˈkaʊntɪŋ/
treating money differently based on subjective categories
mental accounting in a sentence
“Mental accounting explains why people splurge tax refunds.”
Origin of mental accounting
From mental + accounting
Related Words
nudge
subtle policy changes that guide behavior without mandates
bounded rationality
decision-making limited by information, time, and cognitive capacity
loss aversion
the tendency to prefer avoiding losses over acquiring gains
anchoring
over-relying on the first piece of information encountered
endowment effect
valuing something more simply because you own it
hyperbolic discounting
preferring smaller immediate rewards over larger later ones