Sublime

Shared or public commitments are more likely to be maintained,6 as long as we don’t shift the responsibility for our behavior to others.

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

Understanding mental accounts would also improve public policy. Governments can benefit from understanding the concept of mental accounting.

When relativity comes into play, we can find ourselves making quick decisions about large purchases and slow decisions about small ones, all because we think about the percentage of total spending, not the actual amount.

Professor Sheena Iyengar from the Columbia Business School is a psycho-economist who specializes in decision making. Her famous “jam study” was done using specialty jams in a grocery store.

But that’s different from assuming it as an entitlement.

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

This anchoring to a number is the reason people do not react to their total accumulated wealth, but to differences of wealth from whatever number they are currently anchored to.

The author of that seminal 1976 paper, “Knee-Deep in the Big Muddy: A Study of Escalating Commitment to a Chosen Course of Action,” is Harold and Shirley’s son, Barry Staw.