Mental accounting posits that people track their expenditures using cognitive categories or “mental accounts.” The authors propose that this cognitive process can be complemented by an approach that examines how feelings about a sum of money, or the money's “affective tag,” influence its...

Differentiated product models are predicated on the belief that a product's utility can be derived from the summation of utilities for its individual attributes. In one framed field experiment and two natural field experiments, we test this assumption by experimentally manipulating the order of...

Does early release decrease or increase the probability that ex-convicts will return to prison? We exploit unique data from Israeli courts, where appearance before the judge throughout the day has an arbitrary component. We first show that judges more often deny parole requests of prisoners...

Consumer goods and services have psychological value that can equal or exceed their functional value. A burgeoning literature demonstrates that one source of value emerges from the capacity for products to serve as a psychological salve that reduces various forms of distress across numerous...

Why do affective forecasting errors persist in the face of repeated disconfirming evidence? Five studies demonstrate that people misremember their forecasts as consistent with their experience and thus fail to perceive the extent of their forecasting error. As a result, people do not learn from...

The “freemium” model for digital goods involves selling a base version of the product for free, and making premium product features available to users only on payment. The success of the model is predicated on the ability to profitably convert free users to paying ones. Price promotions (or...