Question

According to mental accounting, especially with uncommon purchases, people generally guess that they spend ____ than they actually do.

A) More

B) Less

C) The same

D) Irrelevant

Answer 1

According to mental accounting, people generally guess that they spend less than they actually do on uncommon purchases.

Step-by-step explanation:

According to mental accounting, especially with uncommon purchases, people generally guess that they spend less than they actually do.

Behavioral economists have pointed out that most of us evaluate outcomes relative to a reference point, such as the cost of the product, and think of gains and losses as percentages rather than using actual savings. This leads to the tendency to underestimate how much we spend on uncommon purchases.