When making a decision, humans consider two types of information: information they have acquired through their prior experience of the world, and further information they gather to support the decision in question. Here, we present evidence that data from search engines such as Google can help...

We construct and estimate a formal economic model of mental accounting where utility maximizing consumers facing rationality constraints infrequently update their desired expenditure budgets for different categories of consumption. We use latent Bayesian inference to estimate the model on a...

In his 1999 summary of all things mental accounting (see Thaler [21]), Richard Thaler describes one of the primary components of mental accounting as the budgeting of specific utility-providing activities which can depend, but does not have to, on the resources used to fund those activities. The...

We construct a unifying theory of two-stage budgeting and bounded rationality with mental accounting features. Mental accounting and rational inattention induce behavioral wedges between first-stage and second-stage expenditure budgets. Because reviewing one’s financial activities is...

Previous research has found that people generally contribute more to a charitable or collective cause when they expect to endure pain and exert effort for that cause (Olivola & Shafir, 2013; see also Olivola, 2010). That is, the prospect of their own pain and effort led them to donate more to the...