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Consumers frequently receive refunds from prior purchases. In this research, we examine if money refunded from previous purchases is more likely to be spent than money that does not go through a refund process. Across nine pre-registered studies, we test how consumers' willingness to spend depends on the transaction history of their money. We find that, when people receive a refund and do not need to replace the originally purchased item, they are more likely to spend the refunded money on a discretionary purchase than they are to spend non-refunded money that is otherwise identical. We suggest that this pattern arises because refunded money is earmarked as "spending money" at the time of the initial purchase and then retains that earmark even after the refund is issued. When refunds arrive, therefore, they seem free from obligations and easy to spend. This research documents the psychology of purchase refunds, a topic largely unaddressed in the mental accounting literature to date. [ABSTRACT FROM AUTHOR]

Inconsistency in consumer time preferences has been well established and used to explain seemingly short-sighted behaviors (e.g. failures of self-control). However, prior research has conflated time-inconsistent preferences (discount rates that vary over time) with present bias (greater discounting when outcomes are delayed specifically from the present, as opposed to from a future time). This research shows that time-inconsistent preferences are reliably observed only when choices are substantially delayed (e.g. months into the future), which cannot be explained by present bias. This seeming puzzle is explained by a novel cross-period discounting framework, which predicts that consumers are more impatient when choosing between options occurring in different subjective financial periods. As a result, they display inconsistent time preferences and are less willing to wait for an equally delayed outcome specifically when a common delay to both options moves the larger-later option into a subsequent financial period. Six studies and multiple supplementary studies demonstrate that sensitivity to subjective financial periods accounts for time-inconsistent consumer preferences better than current models of time discounting based on present bias. [ABSTRACT FROM AUTHOR]

Betting more after losses (i.e., "loss‐chasing") is a central clinical feature of disordered gambling. According to prospect theory, increasing risk‐seeking following losses could arise from a failure to "re‐reference." By contrast, successful re‐referencing between successive decisions closes the mental account, and any losses are regarded as final or realized; gamblers should not chase realized losses. The present study sought to test this "realization effect" among gamblers using an ecologically valid online gambling task. We were further interested in whether the effectiveness of the loss realization varied as a function of problem gambling severity. Using online recruitment of past‐year gamblers stratified on the Problem Gambling Severity Index, we tested a group without gambling problems (n = 227), a group with at‐risk gambling (n = 239), and a group with gambling problems (n = 223). Over a sequence of nine bets, after the sixth bet, half of the participants underwent a simulated realization procedure that entailed cashing out from the gambling website and redepositing their remaining funds on another website. The feedback comparison group were shown their account balance after the sixth bet but did not withdraw or transfer their funds. In line with the realization effect, the group with non‐problem gambling significantly reduced their bet after cashing out. The realization procedure did not significantly ameliorate loss‐chasing in the groups with at‐risk gambling or gambling problems. We conclude that the realization effect can be elicited in an online gambling context but that stronger interventions for realizing losses may be required for people experiencing gambling problems. [ABSTRACT FROM AUTHOR]

Problem definition: Loyalty programs have greatly expanded in scale and scope, and loyalty points issued by firms serve as a new form of currency alongside the traditional currency of money. In this paper, we study how consumers decide to pay with points or money for a purchase and how these decisions are affected by consumers' points earning characteristics. Methodology/results: We develop a model of consumers' payment choices and estimate it on proprietary loyalty program data from a major U.S. airline company using a hierarchical Bayesian framework. Our results demonstrate that mental accounting, the subjective perceived value of points, and the reference exchange rate play important roles in consumers' payment choices. Moreover, the primary points earning source and the total earning level are jointly associated with consumers' attitudes toward points and money: Consumers who earn many points and mostly with the focal firm tend to value points more than money, while those who earn few points or mostly through a cobranded credit card tend to value money more than points. To better understand heterogeneity in consumers' attitudes toward points, we propose a probabilistic segmentation of consumers and identify four behavioral segments with distinctive characteristics. Through counterfactual analysis, we demonstrate how a firm can implement money and point pricing policies to optimally target and influence consumers' payment choices. Managerial implications: It is important for firms to understand how consumers think about points and decide to pay with points or money as it affects firms' cash flows, profitability, and consumer loyalty and engagement. We demonstrate that firms can design optimal price targeting policies by utilizing the significant level of heterogeneity in consumers' attitudes toward points. Furthermore, our results indicate that firms that are expanding their partnership networks and offering more points earning sources should consider the impact that this would have on consumers' mental accounting of money and points, and consequently their payment choices. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0287. [ABSTRACT FROM AUTHOR]

Credibly representing category-of-goods mental accounting in an intertemporal optimisation framework is notoriously difficult, as this modelling approach imposes interrelations between the demand for different categories through first-order conditions. This breaks the principle of nonfungibility, contrary to the rationale of mental-accounting theory. Proofs that using intertemporal optimisation is futile in modelling this kind of behaviour are provided, and an alternative is developed: a procedural-behavioural merger of mental accounting and categorisation theories. The merger is necessary to enhance mental-accounting theory, which by itself does not inform about how mental budgets are formed, what they include and how money is spent from various accounts. A classification of six basic consumer types was devised, basing on the differences between their mental-accounting systems and variations of changes of expenditure in response to fluctuations of net disposable income and other possible stimuli. Representing the consumer problem as a behavioural procedure including spending on nondurable and frequently-bought durable goods as well as decisions whether or not to purchase very expensive durable goods, such as houses and flats, allows to model real-world features such as infrequent purchases and rare debt-taking. The devised working-life cycle models of consumer behaviour are consistent with microeconomic evidence on consumption, including those features that are not accounted for by various versions of the permanent income or buffer-stock models. [ABSTRACT FROM AUTHOR]

The study aims to determine the influence of behavioural biases on financial risk propensity. It also attempts to examine the influence of financial risk propensity on investment decisions and the mediational role of financial risk propensity on the relationship between behavioural biases and investment decisions. A survey by questionnaire method is adopted to collect data from 203 respondents using the purposive sampling technique among the investors. The study has found that prospect, herding, and heuristics dimensions of behavioural bias have a significant impact on financial risk propensity, and in turn, financial risk propensity has a significant impact on investment decisions. The results of the study can help to develop more realistic investment valuation models in light of the revised risk-return expectations of investors who act contrary to the traditional concept of rational utility maximisers.

Bridging the gap between the mental accounting and identities/roles literatures, the present research examines how the extent to which an individual's life roles (e.g., "employee," "spouse") are integrated (i.e., have more flexible and permeable psychological boundaries between them) moderates the fungibility of mentally accounted funds. Specifically, individuals with more integrated roles are more able to circumvent the constraints typically imposed by mental budgeting and earmarking; therefore, they are more likely to use funds that are allocated or budgeted for the purposes of one role to service the needs/wants of another role. This holds regardless of whether funds have been (1) allocated to a broader role-specific mental account for future expenditures or (2) earmarked for a specific purchase. The authors find evidence that the effect of role integration arises because those with more integrated roles believe that making purchases for one role using funds allocated or budgeted for the other role is more justifiable. [ABSTRACT FROM AUTHOR]

The options trader’s decisions are expected to be rational decisions but an element of irrationality is observed in decision making. The Disposition effect is the behavioral aspect of an investor which explains his irrational decision-making. The disposition effect is the tendency to keep losing positions too long and selling winning positions too early. The present research work studies the disposition effect in options trading. Options are derivatives of underlying assets which give the holder the right to exercise them at a given date and price. In this research work, elements of disposition effect namely,Herding (HE), Mental accounting (MA), Risk Aversion (RA) are studied along with Trade enablers (TE) and Cost consciousness (CC). The data was collected from 250 respondents’ trading options on the National Stock Exchange, India. The collected data was analyzed using Structured Equation Modeling (SEM). The results reflected that the disposition effect existed in decision-making by options traders. Trade Enabler consisting of Time decay and Open Interest, and Herding emerged as significant elements of disposition effect for options trading. Mental accounting, risk aversion, and cost-consciousness emerged as less significant elements affecting the disposition effect in options trading.

Copyright of Journal of Harbin Institute of Technology. Social Sciences Edition / Haerbin Gongye Daxue Xuebao. Shehui Kexue Ban is the property of Harbin Institute of Technology and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Raising the price of municipal water services is highly fraught in many countries due to the political pressures to keep water bills affordable. As a result, most countries fail to recover the full costs of water provision, a problem made worse by an underestimation of the real cost of providing water. The case of Singapore illustrates that this problem is in part due to "mental accounting," which is consistent with Lasswell's concept of an "intelligence function." Situating an understanding of this intelligence function within the Singapore water case gives a better understanding of the reluctance to raise water prices. [ABSTRACT FROM AUTHOR]

Mental accounting refers to a set of cognitive processes in which people code, categorize and evaluate money depending on where it came from and what they are going to spend it on, and this influences the way they make decisions. The concept of mental accounting violates the principles of standard economic theories, which consider money to be fungible or interchangeable. When people mentally account, they prefer to keep accounts separate and not to move money from one mental account to another. The current study aimed to investigate how people mentally account by designing a tax compliance laboratory experiment and using a variety of scenarios. In the first scenario, which involved different tax rate variations, participants were asked to pay tax on their earned and capital incomes. The results showed that participants formed separate mental accounts and treated their earned and capital incomes differently. Specifically, when faced with high tax rates of 60%, tax evasion was significantly higher for earned (labour) incomes compared to capital incomes. This willingness to cheat in order to protect labour income, suggests that individuals value their earned income more compared to income received from a given endowment (capital income). Interestingly, in subsequent scenarios involving different audit probabilities and fine rates, no mental accounting effects were found. In conclusion, this study provides initial experimental insights into the effects of mental accounting on taxpayer's compliance, but further research is needed to explain nuanced findings and investigate tax decisions for different reference points and other sources of income. [ABSTRACT FROM AUTHOR]

The derivative market is growing faster than capital markets in recent years. Investors' focus is moved towards the futures market rather than on the stock market. The involvement of individual investors has increased in the derivative market. In investing, biases lead investors to make irrational and emotional decisions. The study tracks how investors' behavioural biases influence their investment decisions and also analyses the moderating effect of "financial literacy" and "self-efficacy" in the derivatives market. The snowball sampling technique was used to collect the primary data from 125 investors from Coimbatore city. Factor Analysis, Multiple Regression, and Structural equation Model were used for analysis. The results revealed that Behavioural biases such as "Herding Behaviour", "Overconfidence" and "Mental Accounting" positively affect investing in the derivative market and the moderating variables "Financial Literacy", and "Self-Efficacy" directly influence the behaviour of the investors which in turn affects derivative trading. [ABSTRACT FROM AUTHOR]

Foundational research in marketing and behavioral economics has revealed a great deal about the psychology of budgeting. However, little is known about the extent to which budgets do (or do not) influence consumers' real-world spending. The present research addresses this gap in the literature using naturally occurring budgeting and spending data provided by a popular personal finance app in the UK, a field experiment conducted with members of a Canadian credit union, and a financial diary study conducted with consumers in the US. Budget compliance is generally weak because budgets are wildly optimistic. However, optimistic budgets do help consumers reduce their spending. Moreover, the influence of budgets on spending is surprisingly sticky: consumers continue to reduce their spending six months after setting a budget, even though spending remains over-budget. Impulsive consumers exhibit worse budget compliance than less-impulsive consumers. However, counterintuitively, this is predominately because more impulsive consumers set lower budgets than less-impulsive consumers, not because they spend more. Finally, we provide evidence that budgets influence spending across several theory-informing psychographic variables. Taken together, these findings show that budgets can be both wildly optimistic and highly influential and that beliefs about the nature of consumers' budgets require updating. [ABSTRACT FROM AUTHOR]

This article explores the symbiotic relationship between psychology and accounting, two social sciences investigating human behavior and decision-making. While they share common interests, methods, and challenges, the interdisciplinary nature of these fields requires careful consideration. Hence, this paper offers a comprehensive literature review, illuminating the interdisciplinary aspects of psychology and accounting and presenting a research agenda for future studies. The study adopts a qualitative approach comprising two primary phases. Firstly, a systematic literature review and content analysis are conducted to introduce the concept and dimensions of interdisciplinarity, along with its benefits and challenges. Subsequently, an in-depth analysis of the primary areas of interaction and collaboration between psychology and accounting is performed. The findings unveil current trends and challenges for psychology and accounting as social sciences, identify gaps and opportunities, and highlight the impact and implications of interdisciplinary collaboration and integration in psychology and accounting research. Furthermore, a suggested model is proposed to foster interdisciplinary.

Consumers often experience pain of payment, a tug of negative affect that holds back their spending. While the literature has long viewed pain of payment as self‐regulatory in nature, it has left the dynamics of self‐regulation that lead to the pain of paying largely unaddressed. In self‐regulation, affect arises when people move away from a goal they hold. Thus, understanding the specific goals that people consider when making a payment can help us better predict when pain of payment will arise. We propose that people have a goal to maintain financial slack, and that violating this goal contributes to pain of payment. Thus, people experience more pain of payment when the goal to maintain financial slack is stronger or when it is particularly salient that a purchase entails losing financial slack. Critically, subjective changes in financial slack are not equivalent to objective changes in wealth, altering pain of payment for economically equivalent trades. This research contributes to the existing literature by identifying a novel antecedent to the pain of payment. It additionally expands our understanding of people's preferences between payment systems. Finally, it offers guidance to practitioners who wish to minimize pain of payment among their consumers. [ABSTRACT FROM AUTHOR]

Based on the theory of mental accounting, customers have different perceptions of spending. Based on this psychological principle in customer decision-making, retailers often change the number of discounts and prices. As a result, in this study, we tried to use a sample of 389 Domino Company customers to examine the effects of customers' mental accounting due to the discount offering for cheese sales using SPSS software and the Chi-Squared test in this company. Accordingly, a test was arranged in this regard, and customer opinions were measured. Results show that to maximize the understanding of customers' savings, they should use centralized discount frames, not all discount frames. [ABSTRACT FROM AUTHOR]

This study aimed to explain mental accounting with tax attitudes in smartening the tax system in 2022. This qualitative and survey study used the Delphi method to identify the optimal situation, examine the current situation and then explain the mental accounting model with tax attitudes in smartening the tax system by a cross-sample questionnaire. In this research, the chain sampling method was used in the Delphi section. In the first round of Delphi, 20 experts were identified, and finally, 13 declared their readiness to cooperate in providing expert opinions. The size of the statistical sample was calculated using Cochran's formula, which includes the employees of the Tax Affairs Department of Tehran in the field of accounting, and 285 people were selected as a statistical sample. After distributing the questionnaire to the statistical sample, the collected data was analyzed using PLS software. The results showed a significant relationship between income tax and tax knowledge, religiosity, patriotism, and the perception of the transparency of tax reports in smartening the tax system. In addition, there was a significant relationship between value-added tax and tax knowledge, religiosity, patriotism, and perception of the transparency of tax reports in smartening the tax system. There was a significant relationship between tax thinking and tax knowledge, religiosity, patriotism, and the perception of the transparency of tax reports in smartening the tax system. The results will help planners and policymakers make Iran's tax system more intelligent. [ABSTRACT FROM AUTHOR]

Is consumers' present spending influenced by future changes in their income? From an economic perspective, consumers should reduce present spending when anticipating a future income decrease and boost spending when anticipating a future income increase to maximize their welfare. We find that although consumers tend to adjust their spending to a future income decrease, they are less likely to do so to a future income increase. We show that this is, in part, due to a low sense of self‐continuity, a tendency to view the future self whose income increases as if it were a different person and, as a result, to categorize present and future income into two separate mental accounts. Enhancing self‐continuity leads consumers to combine present and future income in a single mental account, and thereby facilitates adjustment of present spending to a future income increase. Whereas prior work linked high self‐continuity to reduced present spending, we identify a context in which high self‐continuity can boost present spending. We discuss the implications of these findings for consumer well‐being. [ABSTRACT FROM AUTHOR]

This paper studies a framework of Reliable Capacitated Facility Location Problem with Single source constraint, which allows us to capture the mental account management problem for a bank under uncertain environment. In the problem, each facility, corresponding to a financial product, has limited capacity and may fail randomly, which represents that the product fails to reach the threshold level of return. Each customer, corresponding to a mental account, is served by a single primary facility or product, and its demands, or the setting goals, can be split on several backup facilities or alternative investments with redundant capacity. With the operation, a portion of the satisfaction can still be met by the backup facilities when the primary service of a customer fails. We formulate a mixed integer programming model for the problem and design a Lagrangian relaxation based solution algorithm, which sophisticatedly exploits the structure of the model and transfers the complicated relaxation problems into 0–1 knapsack problems to reduce the complexity. A local search procedure is also incorporated into the algorithm to enhance the accuracy of small- and large-scale computation. Finally, a real-life case of mental accounting is investigated to illustrate the application of the decision model. [ABSTRACT FROM AUTHOR]

As the financial condition of most individuals has taken the toll during the COVID-19 pandemic, this study aims to analyze varied risk perceptions owing to dynamic behavioral aspects ingrained in individuals. The study primarily incorporates the impact of COVID-19 induced risk perceptions on psychological bias and its aftermath on perceived investment performance, with gender differences being moderators in the aforesaid relationship. A mix of probability and non-probability sampling has been used to collect data from 1,133 respondents through a structured questionnaire. The partial least square structured equation modeling (PLS-SEM) has been employed as an estimation technique. The findings highlight that risk perception has been significant in affecting the heuristics and prospects. However, it is insignificant in directly impacting the perceived investment performance. However, psychological biases, proxied by heuristics and prospects, were found to mediate the relationship between risk perception and perceived investment performance. Practical implications suggest a judicious combination of risk, return, and behavioral portfolio to stimulate, and upscale investments thereby enhancing the investment momentum to reach pre-covid levels. At the same time, the relevance for society lies in the fact that they need to re-consider their investment portfolio to adjust for uncertainties like COVID-19. Future studies can embark on cross country research to investigate varied risk perception-investment performance relationships prevalent in respective economic settings. Also, studies can explore the variation in findings with respect to different classes of investors that is, experiences, first timers, institutional, influencers and others. [ABSTRACT FROM AUTHOR]

This research delves into the socio-economic aspects of online gambling in Iran, exploring the underlying cultural drivers that have contributed to its rapid growth in recent years. Online gambling's prevalence is intricately linked to cultural norms and values, both overt and covert, which have shaped its emergence in the country. Despite the religious, legal, and cultural taboos associated with gambling in Iran, this study investigates the cultural motifs that have challenged these obstacles, particularly among the youth. To unravel the psychological mechanisms at play among young online gamblers, this study adopts a qualitative approach, employing in-depth interviews with 17 male online gamblers aged between 20 and 40, alongside participatory observations. The data is analyzed thematically, with a focus on cultural motifs that reinforce mental accounting biases, drawing from the principles of behavioral economics. Notably, the central theme that emerges from this analysis is the "psychology of success", a worldview that influences the mindset and actions of individuals engaged in online gambling. The findings of this study reveal a significant thematic alignment between the teachings of the psychology of success and the cultural elements that bolster cognitive biases in the speech and conduct of online gamblers. The psychology of success, which emphasizes a sense of agency and empowerment, appears to drive cultural change and contributes to the widespread acceptance of online gambling despite its illegitimate status. Furthermore, the study highlights a connection between the prevalence of online gambling and the devaluation of the national currency. [ABSTRACT FROM AUTHOR]

In the contemporary globalized landscape characterized by international and intercultural decision-making processes, interconnected supply chains, and diverse customer relations, susceptibility to biases and heuristics poses a substantial threat to the efficiency of decision making. This research explores the relatively understudied influence of culture on individuals' susceptibility to concepts derived from behavioral economics. Employing the Individual Cultural Values Scale (CVSCALE), we examine the impact of culture on the allure of choice, mental accounting, and overconfidence among 837 participants from Australia (AU), China (CN), Germany (GE), and the United States (US) through logistic regression analysis. At the individual level, discernible interactions between power–distance, allure of choice, and overconfidence are observed. On the national scale, power–distance (AU, US), uncertainty avoidance (US), and masculinity (CN) significantly impact the allure of choice, while overconfidence is influenced by power–distance (US) and masculinity (US). Our analysis shows that culture plays a pivotal role in shaping susceptibility to biases and heuristics, thereby influencing decision-making processes. The findings advocate for a culturally differentiated approach to behavioral economics, emphasizing the need to tailor strategies and interventions based on cultural nuances. [ABSTRACT FROM AUTHOR]

In a risk society, the survival and development of humans are facing threats of complex and severe public crisis events. Public participation in collaborative governance (CG) of public crisis events is increasingly recognized as an important direction for the reform of the current and future emergency management system. Previous studies of CG have mainly focused on the macro level and ignored to address micro‐level discussions of the behavioral strategy evolution of stakeholders. From a fresh value perception perspective, this study constructs an evolutionary game model to clarify the evolution mechanism of multi‐level emergency CG. First, the value perception model is built based on Prospect Theory and Mental Accounting to optimize the traditional game matrix. Second, the evolutionary stability is analyzed to solve the system evolution law. Finally, numerical simulation is conducted in the case of Heilongjiang province, a main region of food and energy supply in China. Results showed that (1) the CG game system has a complex evolutionary path; (2) the behavior of game players is affected by perceived incomes and perceived costs; (3) compared with the reference value and the risk aversion coefficient of income accounts, game players are more sensitive to that of cost accounts; (4) enhancing the perceived value of public psychological satisfaction and government reputation is helpful for the long‐term construction of CG. Overall, this study aims to highlight the potential utility of value perception in promoting effective implementations of CG and to provide new insights for the development of CG in China and other countries. [ABSTRACT FROM AUTHOR]

This study examines the effect of financial socialisation, herding, overconfidence and mental accounting on investment decisions among stock investors in Jakarta. The sample in the study is stock investors who reside in Jakarta. The purposive sampling method collected 205 respondents through Google Forms distributed online on social media. The research data were analysed with a structural equation system using SmartPLS.3.2.9 software. The results showed that financial socialisation positively and significantly influences Generation Z's investment decisions in Jakarta. Overconfidence positively and significantly influences Generation Z's investment decisions in Jakarta. Mental accounting has a positive and significant influence on the investment decisions of Generation Z in Jakarta.

Abstrak – Pajak dan Sedekah dalam Kesadaran Mental Accounting dan Pancasila Tujuan Utama – Penelitian ini bertujuan untuk memahami kesadaran di balik fenomena tindakan pelaku usaha yang taat membayar pajak dan bersedekah. Metode – Penelitian ini menggunakan metode deskriptif kualitatif. Informan dalam penelitian ini adalah dua orang pelaku UMKM. Temuan Utama – Kesadaran subjek atas ketaatan membayar pajak dan bersedekah merefleksikan noneconomic mental accounting. Pertimbangan non-ekonomik menjadi account reference point yang dominan. Kesadaran ketuhanan, kemanusiaan, kebersamaan, kebijaksanaan, dan keharmonisan merupakan account reference point dari mental accounting yang merefleksikan nilai-nilai Pancasila. Implikasi Teori dan Praktik – Ketaatan membayar pajak memerlukan pertimbangan nonekonomik. Selain itu, ketaatan ini memerlukan keikhlasan, seperti halnya bersedekah. Kebaruan Penelitian – Penelitian ini mengungkapkan kesadaran subjek membayar pajak dan bersedekah berdasarkan mental accounting, yang direfleksikan pada nilai-nilai Pancasila. Abstract - Tax and Almsgiving in Mental Accounting and Pancasila Awareness Main Purpose - This research aims to understand the consciousness behind the phenomenon of the actions of business actors who obey paying taxes and giving alms. Method - This research uses descriptive qualitative method. Informants in this research are two MSME actors. Main Findings - The subject's awareness of the obedience to pay taxes and charity reflects the tax and giving alms reflects noneconomic mental accounting. Considerations Non-economic considerations become the dominant account reference point. Awareness of divinity, humanity, togetherness, wisdom, and harmony are the account reference points of mental accounting that reflects the values of Pancasila. Theory and Practical Implications - Tax compliance requires non-economic considerations. In addition, this obedience requires sincerity, just like giving alms. Novelty - This research reveals the subject's awareness of paying taxes and giving alms based on mental accounting. based on mental accounting, which is reflected in the values of Pancasila.

The era of Covid-19 is a condition that illustrates the uncertainty of national and world economic conditions, which encourages individuals to be able to manage their economy and finances. Therefore, this research aims to explain whether mental accounting, loss aversion bias, as well as risk tolerance can affect investment decision-making in the Covid-19 situation from the point of view of behavioral finance theory. The results of research using SEM PLS analysis show that Mental Accounting, Loss Aversion Bias, as well as Risk Tolerance, have an effect on investment decision-making. Based on behavioral finance theory, the results of the study illustrate that in the Covid 19 pandemic situation, individuals will generally respond to information received as a basis for making decisions by paying attention to the level of risk and optimizing the rate of return from the investment made.

Student loans defer the cost of college until after graduation, allowing many students access to higher lifetime earnings and colleges and universities they otherwise could not afford. Even with student loans, however, the authors find that students psychologically realize the financial costs of a college education long before their loan repayments begin. This early cost realization frames financial decisions between most pairs of colleges as an intertemporal trade-off. Students choose between investments with (1) smaller short-term costs but smaller long-term returns (a lower-cost, lower-return [LC-LR] college) and (2) larger short-term costs but larger long-term returns (a higher-cost, higher-return [HC-HR] college). The authors find that early cost realization increases preferences for LC-LR colleges—preferences that could reduce lifetime earnings—in both simulations and experiments. Preferences for LC-LR colleges are pronounced among financially impatient students and in choice pairs of LC-LR and HC-HR colleges where the equilibrium is set at a low-discount-rate threshold. A return-on-investment strategy, future uncertainty, and debt aversion cannot explain these results. A decision aid synchronizing the psychological realization of costs and benefits reduced preferences for LC-LR colleges, illustrating that the preference is constructed and receptive to interventions. [ABSTRACT FROM AUTHOR]

The introduction of autonomous buses (ABs) in many countries addresses traditional bus operation challenges, but overlooks critical perceived risks, like functional, safety, and security issues, affecting autonomous driving technology acceptance. This research uses the mental accounting theory to investigate both the positive and negative effects of the intention to use ABs. A hybrid discrete choice model captures latent and observed factors and considers COVID-19's impact on travel mode preferences. Results show that both latent and observed factors significantly affect AB adoption intention, including compatibility, relative advantage, safety/security risks, perceived risks, in/out-of-vehicle time, and travel cost. Trial rides positively impact adoption intention. Familiarity with unmanned tech also affects choice of shared bicycles and ABs, allowing for tailored promotional programs. The conclusions herein offer insights for bus operators, manufacturers, and city governments to integrate ABs into public transport systems effectively. • Mental accounting theory to examine the positive and negative latent impacts on intention. • A hybrid choice model to estimate the effects of both latent and observed factors. • Analytical results show the perceived sacrifice outweighs the perceived benefit of using autonomous bus. • Segmented promotion strategies are designed specifically for certain passengers. • The proposed approach can be generalized in other cities. [ABSTRACT FROM AUTHOR]

The Mental Accounting Theory has shown increasingly its relevance to the study of people's profile when it comes to understanding financial decisions, adding fundamental value to Behavioral Finance. Thus, this research focused on the involvement of Brazilian investors with mental accounting practices and the way they think about their personal finances. To this end, a study was conducted with structural equation modeling based on partial least squares, through a survey applied to 201 Brazilian investors, to identify which elements most impact the cognitive process of mental accounting. The main results show that psychological and behavioral factors are of singular importance and that the homo economicus, in the eyes of traditional economics a fully rational and utility maximizing being, must be seen as human, i.e., an individual exposed to the countless heuristics and biases of everyday life, which directly impact his attitudes. Thus, it is clear that a good financial education is not a sufficient factor to avoid making bad decisions. Therefore, it is of great importance to understand the behavioral elements that interfere in the cognitive process of individuals, so that finance professionals can encourage the use of mental accounting as a tool for planning and financial self-control, in the search for more conscious financial decision-making, contributing in a practical way to better money management and individual self-knowledge, increasing the levels of financial and social well-being and promoting full citizenship. [ABSTRACT FROM AUTHOR]

The objective of this study of student-consumers in higher education is to investigate the direct influence of student choice factors on student expectations. The mediating role of perceptions of employability in the relationship between costs of study (fees) and student satisfaction, and the outcome variable of students' recommendations, is examined in the study based on respondents' chosen U.K. higher education institution (HEI). The theoretical framework draws on cost-expectation-satisfaction assessment and expectation of employability after graduation. A survey sample of 11,822 respondents and 140 higher education institutions suggests university reputation, course design, service quality, and campus social life directly influence student expectations. Student expectations of choice factors mediate the relationship between the cost of study and satisfaction, and students' perceptions of employability after graduation mediate the relationship between the cost of study and the likelihood of making a recommendation to peers. The course design was the most influential factor impacting student expectations. [ABSTRACT FROM AUTHOR]

Copyright of Psychological Science is the property of Psychological Science Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study explores the influence of instructional interventions in mitigating mental accounting bias during capital investment decisions. Initially, we investigate the potential costly errors resulting from mental accounting. Subsequently, we employ instructional strategies to reduce this cognitive bias. Employing an experimental methodology, we employ an 8x2 mixed factorial design to examine the impact of financing sources on mental accounting and the effectiveness of instructional interventions. The findings reveal that managers prone to mental accounting tend to retain debt-financed assets over equity-financed assets. Importantly, instruction proves effective in alleviating this cognitive bias. This research holds significance for both academic scholars and practitioners. It sheds light on the deficiency of instructional resources in accounting education for fostering essential professional judgment skills among students. It is recommended that Finance, Business, and Accounting faculties incorporate modules on mental accounting and related cognitive biases in postgraduate programs. Furthermore, manufacturing industries can benefit from employee training programs to reduce cognitive biases associated with mental accounting in capital budgeting. [ABSTRACT FROM AUTHOR]

This study aims to determine the effect of peer-to-peer lending (P2PL) on small and medium enterprises (SMEs) underpinned by the theory of planned behavior and asses its impact on the borrower’s intention to recommend such a platform. This paper used a quantitative survey method with partial least squares structural equation modeling to analyze the data collected through a questionnaire. The data were obtained from 395 respondents who are entrepreneurs or business leaders in SMEs in Indonesia and had experience in borrowing business loan funds from the P2PL apps. The structural questionnaire was distributed from January to May 2022. The results of this study indicate that the three core components of the theory of planned behavior (attitudes, subjective norms, and perceived behavioral control) can significantly influence the intention to continue usage and the intention to recommend with an R-squared value of 0.626, which indicates a meaningful explanatory power. The results proved that perceived benefits and risk and electronic word-of-mouth are the antecedents with significant influence. Moreover, this study provides new insights into how self-efficacy and mental accounting can influence perceived behavioral control. These findings could suggest that P2PL management should be more innovative in developing effective marketing strategies based on the traits and borrower’s points of view. Particularly, they could emphasize customer segmentation based on mental accounting.