About Mental Accounting

ABSTRACT : Why are people willing to spend more than cash when they pay with a credit card? Why arethey saving up for retirement but also in the same time why are they accumulating credit card debt? If someoneelse is paying your credit card debt, you have a perfectly reasonable justification. But there is also someonewhom are not so lucky. Why do we ignore the fact of a payment that will be out of our pocket on the statementpayment date? How does the journal in our brain work? Where can the money come from and where can themoney go?The purpose of this article, which tries to answer all these questions in terms of mental accounting, isto examine in depth the mental accounting, which is one of the behavioral patterns of the investor in behavioralfinance.