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Fungibility, labels, and consumption
- Publication Year :
- 2018
- Publisher :
- Oxford University Press, 2018.
-
Abstract
- Fungibility of money is a central assumption in the theory of consumer choice: any unit of money is substitutable for another. This implies that the composition of income or wealth is irrelevant for consumption. We find that even in a simple, incentivized setup many subjects do not treat money as fungible. When a label is attached to a part of their budget, subjects change consumption according to the label. We first provide suggestive evidence from the field and then use a laboratory experiment to show this result in a tightly controlled environment. In the lab, subjects with lower cognitive abilities are more likely to violate fungibility. The findings lend support to behavioral models of narrow bracketing and mental accounting. One implication of our results is that in-kind benefits distort consumption more strongly than usually assumed. (JEL: C91, C93, D01, H31, I38)
- Subjects :
- mental accounting
History
Test
Polymers and Plastics
narrow bracketing
Mental accounting
Consumer choice
jel:D01
Fungibility
Geld
Industrial and Manufacturing Engineering
C93
Microeconomics
0502 economics and business
C91
Economics
ddc:330
Sachtransfer
H31
Konsumentenverhalten
050207 economics
In-kind benefits
Business and International Management
Bracketing
Deutschland
Feldforschung
050205 econometrics
Simple (philosophy)
Consumption (economics)
Fungibility, In-kind Benefits, Mental Accounting, Narrow Bracketing, Field Experiment, Laboratory Experiment
I38
jel:C93
jel:C91
05 social sciences
fungibility, In-kind benefits, mental accounting, inframarginal consumers, field experiment, laboratory experiment
laboratory experiment
jel:H31
field experiment
Verhaltensökonomik
jel:I38
D01
Laboratory experiment
General Economics, Econometrics and Finance
Kognition
Theorie
inframarginal consumers
Subjects
Details
- Database :
- OpenAIRE
- Accession number :
- edsair.doi.dedup.....b0b839f8279c63ae9020e514126c54de