Essay About Only Difference And Form Of A Wallet Card

Mental Accounting
1. Introduction
Neel and Sam planned to spend $100 on a theater ticket. Neel purchased a ticket but then
lost it carelessly. In a separate instance of carelessness, Sam lost $100 in cash. Neel was
hesitant to spend a further $100 on a replacement ticket, while Sams loss did not
interrupt her theater plans.
Edbert and Edrea both had $200 season tickets to a four day cricket tournament at the
Lords cricket ground. The weather on the last day wasnt great, and although the game
was on it was best watched on TV. Edbert looked at his ticket in the form of a wallet card
and stayed home saying “Ive got a lot of value from this already”. Edrea saw hers, in the
form of an unused coupon with todays date and felt compelled to go to the stadium to
avoid wasting what she had paid for,
Krutika and Georgia had both decided to purchase two items – a fridge (for $3000) and a
microwave oven (for $300) at an appliance store. Just as they were about to pay, they
were informed that another branch of the same store, about an hour away on a traffic-
infested highway was offering a promotion. Krutika heard that the fridge was on sale at
the other branch for $2850, while Georgia heard that the microwave was on sale for $150.
Krutika shrugged her shoulders and decided not to waste her time commuting to the other
branch; Georgia jumped into her car and joined the traffic.
While the three stories above are from fairly different domains, they share two common
characteristics. First, all three stories have to do with the evaluation of a payment and its consequence on
decision making. Second, in all stories, the two characters are in identical financial positions when their
decisions are stripped down to the bare bones. Neel and Sam were both poorer by $100, both due to
carelessness on their part. The only difference was that Neels loss was in the form of a paper ticket
while Sams loss was in the form of paper cash. Edbert