Mental accounting

Mental accounting (English mental accounting ) is a theory of a systematic cognitive problem and the subject of behavioral economics (English Behavioral Economics ). According to this theory, people share financial transactions in mental accounts, and treat them differently depending on the account. This results in wrong decisions arise. The theory goes back to work of Chicago professor Richard Thaler.

Education accounts

The ( fictional) accounts that make up the human unconscious, can be formed according to different categories. Examples would be, for example, "Gifts", "Costs associated with the summer in conjunction ", " share price gain." These accounts form helps to keep track of income and expenses.

Problems

Decision Irrelevant costs

Decision Irrelevant costs as sunk costs should not be included in the rational decision-making. The mental accounts prevents the formation but under certain circumstances the recognition that it is such.

Thaler describes an empirical experiment in which the subjects want to go to the theater and the ticket costs $ 10. In the experiment, the subjects now to be told they were standing at the box office and had lost the card and these would have to buy new. 56 % are not ready for that. Mental these 10 dollars to the account " purchase theater ticket " slammed. For the card costs $ 20, which is more than the subject is worth the trip to the theater. Another sub-group of experiment participants should buy the ticket at the box office for $ 10. They were then told they had lost the $ 10 cash and must now pay the card from other money. Here, 88 % decided to buy the card. Mental these 10 dollars to the account " cash loss " slammed. The mental price of the ticket thus remained at $ 10.

Loss aversion

People assessed according to the prospect theory the possible loss of money significantly higher than the chance of winning. This loss aversion leads to the tendency to the status quo.

Gains and losses are recognized in different mental accounts. Only then can it ever occur this bias.

Lack of " clearing " of these accounts

Rational decisions in interdependent situations require joint consideration. This can be prevented by the division into mental accounts.