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Investments glossary

Mental Accounting

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Quotes of the day:

All that glitters is not gold, and things that look warm are often cold!

— Yassine Aumerally

Mental accounting refers to the different values people place on money, based on subjective criteria, that often has detrimental results. Mental accounting is a concept in the field of behavioral economics. Developed by economist Richard H. Thaler, it contends that individuals classify funds differently and therefore are prone to irrational decision-making in their spending and investment behavior.



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