Mental accounting matters Export

@article{Thaler99, abstract = {Mental accounting is the set of cognitive operations used by individuals and households to organize, evaluate, and keep track of financial activities. Making use of research on this topic over the past decade, this paper summarizes the current state of our knowledge about how people engage in mental accounting activities. Three components of mental accounting receive the most attention. This first captures how outcomes are perceived and experienced, and how decisions are made and subsequently evaluated. The accounting system provides the inputs to be both ex ante and ex post cost-benefit analyses. A second component of mental accounting involves the assignment of activities to specific accounts. Both the sources and uses of funds are labeled in real as well as in mental accounting systems. Expenditures are grouped into categories (housing, food, etc.) and spending is sometimes constrained by implicit or explicit budgets. The third component of mental accounting concerns the frequency with which accounts are evaluated and ?choice bracketing?. Accounts can be balanced daily, weekly, yearly, and so on, and can be defined narrowly or broadly. Each of the components of mental accounting violates the economic principle of fungibility. As a result, mental accounting influences choice, that is, it matters. Copyright {\copyright} 1999 John Wiley \& Sons, Ltd.}, address = {Graduate School of Business, University of Chicago, USA}, author = {Thaler, Richard H.}, citeulike-article-id = {841352}, citeulike-linkout-0 = {http://dx.doi.org/10.1002/(SICI)1099-0771(199909)12:3%3C183::AID-BDM318%3E3.0.CO;2-F}, citeulike-linkout-1 = {http://www3.interscience.wiley.com/cgi-bin/abstract/62502102/ABSTRACT}, comment = {Recommended by Jinhua Zhao for his seminar in the behavioral economics group (BEG) at Iowa State University.}, doi = {10.1002/(SICI)1099-0771(199909)12:3%3C183::AID-BDM318%3E3.0.CO;2-F}, journal = {Journal of Behavioral Decision Making}, keywords = {behavioraleconomics, budgeting, economics, jinhua\_zhao\_seminar, mentalaccounting}, number = {3}, pages = {183--206}, posted-at = {2006-09-12 21:10:21}, priority = {2}, title = {Mental accounting matters}, url = {http://dx.doi.org/10.1002/(SICI)1099-0771(199909)12:3%3C183::AID-BDM318%3E3.0.CO;2-F}, volume = {12}, year = {1999} }

TY - JOUR ID - Thaler99 L3 - citeulike-article-id:841352 N2 - Mental accounting is the set of cognitive operations used by individuals and households to organize, evaluate, and keep track of financial activities. Making use of research on this topic over the past decade, this paper summarizes the current state of our knowledge about how people engage in mental accounting activities. Three components of mental accounting receive the most attention. This first captures how outcomes are perceived and experienced, and how decisions are made and subsequently evaluated. The accounting system provides the inputs to be both ex ante and ex post cost-benefit analyses. A second component of mental accounting involves the assignment of activities to specific accounts. Both the sources and uses of funds are labeled in real as well as in mental accounting systems. Expenditures are grouped into categories (housing, food, etc.) and spending is sometimes constrained by implicit or explicit budgets. The third component of mental accounting concerns the frequency with which accounts are evaluated and ?choice bracketing?. Accounts can be balanced daily, weekly, yearly, and so on, and can be defined narrowly or broadly. Each of the components of mental accounting violates the economic principle of fungibility. As a result, mental accounting influences choice, that is, it matters. Copyright © 1999 John Wiley & Sons, Ltd. IS - 3 JF - Journal of Behavioral Decision Making AD - Graduate School of Business, University of Chicago, USA EP - 206 TI - Mental accounting matters VL - 12 SP - 183 KW - behavioraleconomics KW - budgeting KW - economics KW - jinhua_zhao_seminar KW - mentalaccounting N1 - Recommended by Jinhua Zhao for his seminar in the behavioral economics group (BEG) at Iowa State University. AU - Thaler, Richard PY - 1999/// UR - http://dx.doi.org/10.1002/(SICI)1099-0771(199909)12:3%3C183::AID-BDM318%3E3.0.CO;2-F ER -