This tells us that having the money in an account dedicated to a particular activity influenced our participants to spend more. Fifty percent more, in this case.

Mental Accounting. George is worried about his finances—as evidenced by his decision to save money on coffee in the morning—yet nonchalantly spends $200 at the casino. This contradiction occurs, in part, because he puts that casino spending into a different “mental account” than the coffee. By taking his money and converting it into pieces of plast

From the early days of research on decision-making it has become clear that we choose from among descriptions of various things, not from among the things themselves.

percent. In other words, they each believe they’re putting in a great deal of effort, that their partner is doing less, and that, perhaps, that division of labor is not fair.

Money is not the only attribute that is easily used for points of comparisons.

Money works the same way. It isn’t the final goal in life, it’s a means to an end. But because money is much more tangible than happiness, well-being, and purpose, we tend to focus our decision-making on money instead of on our ultimate, more meaningful goals.

Sunk cost is finding that once we’ve invested in something, we have a hard time giving up on that investment. Thus we are likely to continue investing in the same thing. In other words, we don’t want to lose that investment, so often we throw good money after bad, adding a dash of wishful thinking.

The theft had become a signal of the Mona Lisa’s worth. Surely, no one would steal a worthless painting. The crime brought long-term value to the Mona Lisa and the Louvre.

Think about transactions in terms of opportunity costs by considering more explicitly what we’re sacrificing for what we’re getting. For instance, we can translate dollars into time—how many hours of wages, or months of salary, we must work to pay for something.