Description

Tendency to assign different mental values to the same sum of money.

Thaler, R. (1985). Mental Accounting and Consumer Choice. Marketing Science, 4(3), 199–214.

Items (1)

Part A

Suppose you are at a big store, where you intend to purchase an oven. The model you've selected is priced at is 2000 TWD, and you are about to pay. However, at the last minute, you notice an advertisement flyer featuring the same oven, at a price of 1700 TWD. The discount offer is only valid for today. You'll need to drive 10 min to buy it in a competing store. Would you like to take the bus to the other store to take advantage of the lower price?

a. Yes
b. No

Part B

Now suppose you are in the same store, this time to buy a refrigerator. The refrigerator you want costs 30,000 TWD, and you are willing to pay. While you are waiting, you strike up a conversation with another store patron, who reveals that she has seen the same refrigerator available for 29,700 TWD at a competing local store about 10 min drive away. Will you drive to the other store to obtain the lower price?

a. Yes
b. No

Scoring

Participants who select "a" in part A and "b" in part B are coded as biased.

Sources

Pompian, M. M. (2011). Behavioral finance and wealth management: How to build optimal portfolios that account for investor biases. New Jersey: John Wiley & Sons, Inc.

Rieger, M. O., Wang, M., Huang, P.-K., & Hsu, Y.-L. (2022). Survey evidence on core factors of behavioral biases. Journal of Behavioral and Experimental Economics, 101912.