Sublime

People do some crazy things with money. But no one is crazy. Here’s the thing: People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of lu

we don’t like to pick extreme options – we like compromise and balance, because it feels that way we are less likely to make a mistake.

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

Pennies-a-day pricing: Reduce sticker shock and build loyalty.

we should be wary of small amounts in such situations, because the effects indicated by prospect theory diminish. It’s probably better to pay someone back $10 at once rather than pay them $1 over 10 periods. It can also make more sense for a newspaper to receive a subscription payment as a lump sum (say $360) than receive its money in 12 equal paym

“Tell her to think like a trader! You win a few, you lose a few.” “I decided to evaluate my portfolio only once a quarter. I am too loss averse to make sensible decisions in the face of daily price fluctuations.” “They never buy extended warranties. That’s their risk policy.” “Each of our executives is loss averse in his or her domain. That’s perfe