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  5. Mental Budgeting versus Relative Thinking

AEA Papers and Proceedings

ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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Mental Budgeting versus Relative Thinking

  • Samuel Hirshman
  • Devin Pope
  • Jihong Song
AEA Papers and Proceedings
vol. 108, May 2018
(pp. 148–52)
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Abstract

In many situations, mental budgeting and relative thinking predict results that are in opposing directions. We study a situation of this type and provide evidence for when the predictions of one model will dominate the other.

Citation

Hirshman, Samuel, Devin Pope, and Jihong Song. 2018. "Mental Budgeting versus Relative Thinking." AEA Papers and Proceedings, 108: 148–52. DOI: 10.1257/pandp.20181095

Additional Materials

JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making