Is That Real Money or Fun Money? The Trap of Mental Accounting

Curiosity Weekly

Warner Bros. Discovery

Science

4.6 • 964 Ratings

🗓️ 27 November 2020

⏱️ 14 minutes

🔗️ Recording | iTunes | RSS

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Summary

Learn about how to avoid the too-familiar trap of mental accounting, the story of when a glitchy instrument led to evidence for the Big Bang, and the real science behind how to make cut flowers last longer.

Is That Real Money Or Fun Money? The Familiar Trap Of Mental Accounting by Ashley Hamer

Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206. https://onlinelibrary.wiley.com/doi/abs/10.1002/(SICI)1099-0771(199909)12:3%3C183::AID-BDM318%3E3.0.CO;2-F
Choices, Values, and Frames | Handbook of the Fundamentals of Financial Decision Making. (2020). Worldscientific.Com. https://www.worldscientific.com/doi/abs/10.1142/9789814417358_0016
Lehrer, J. (2011, February 14). The Curse of Mental Accounting. Wired; WIRED. https://www.wired.com/2011/02/the-curse-of-mental-accounting/
Mental Accounting Definition. (2020). Investopedia. https://www.investopedia.com/terms/m/mentalaccounting.asp

That time a glitchy instrument led to evidence for the Big Bang by Cameron Duke

A Science Odyssey: People and Discoveries: Penzias and Wilson discover cosmic microwave radiation. (2020). Pbs.Org. https://www.pbs.org/wgbh/aso/databank/entries/dp65co.html
Holmdel Horn Antenna. (2020). @apsphysics.

https://www.aps.org/programs/outreach/history/historicsites/penziaswilson.cfm

Wall, M. (2014, May 20). Cosmic Anniversary: “Big Bang Echo” Discovered 50 Years Ago Today. Space.Com; Space. https://www.space.com/25945-cosmic-microwave-background-discovery-50th-anniversary.html

How to make cut flowers last longer by Ashley Hamer (Listener question from Lisa)

What’s In Your Flowers’ Food? | Bouqs Blog. (2018, July 17). The Bouqs Co. Blog. https://bouqs.com/blog/whats-in-your-flowers-food/
S.E. Gould. (2013, January 20). Making sugar from carbon dioxide: The Calvin Cycle. Scientific American Blog Network. https://blogs.scientificamerican.com/lab-rat/making-sugar-from-carbon-dioxide-the-calvin-cycle/
The Science of Keeping Flowers Fresh | Experiments | Steve Spangler Science. (2019). The Lab. https://www.stevespanglerscience.com/lab/experiments/science-keeping-flowers-fresh/
Curtin, C. (2007, February 14). Fact or Fiction?: Vodka and Citrus Sodas Keep Cut Flowers Fresh. Scientific American. https://www.scientificamerican.com/article/fact-or-fiction-vodka-citrus-sodas-keep-flowers-fresh/
Nell, T.A., Reid, M.S. (2004, January) Special Research Report #410: Postproduction - The Three C’s of Success with Fresh Cut Flowers (2) – “Cleanliness”. The American Floral Endowment. https://endowment.org/wp-content/uploads/2014/03/410postprod.pdf
Nell, T.A. (2004, June) De-myth-tifying Cut Flower Care. Florists Review. P. 51-54. https://web.archive.org/web/20040618065419if_/http://www.floristsreview.com/main/june/featurestory.html

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Transcript

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0:00.0	Hi, you're about to get smarter in just a few minutes with Curiosity Daily from Curiosity.com.
0:07.0	I'm Ashley Hamer.
0:08.0	And I'm Natalia Reagan. Today you learn how to avoid the too familiar trap of mental accounting, the story of when a
0:14.2	glitchy instrument led to evidence for the Big Bang, and the real science behind how to make
0:18.9	cut flowers last longer.
0:21.0	Let's satisfy some curiosity.
0:22.4	When is $10? longer. Let's satisfy some curiosity.
0:24.1	When is $10 not worth $10?
0:27.6	That might seem like a ridiculous question, but $10 can have vastly different values in your
0:32.1	head depending on where it comes from and what you've
0:34.8	decided it's meant for.
0:37.1	This kind of financial psychology is called mental accounting, and while it's incredibly common, it can get you into trouble.
0:44.4	To understand what I mean try this thought experiment. Imagine you pay $10 for a ticket
0:50.3	to a play but then realize you've lost the ticket.
0:53.2	Would you pay $10 for another ticket?
0:56.0	Okay, now rewind.
0:57.8	And imagine you're about to buy a ticket to a play and you realize you've lost a $10
1:02.1	bill. Would you still a $10 bill?
1:03.0	Would you still pay $10 for a ticket?
1:06.0	When researchers asked study volunteers these questions,
1:09.0	less than half of them said they'd buy a second ticket
1:12.0	if they lost the first. But a whopping 88 percent
	...

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