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Elementary 'psychological accounting.' (research on decision-making)

Elementary 'psychological accounting'

Imagine you are going to a play where admission is $10 perticket. As you enter the theater you discover you have lost a $10 bill. Would you still pay $10 for a ticket to the play?

Now imagine you go to the play after having paid the $10admission fee, but as you enter the theater you discover that the ticket is lost. The seat was unmarked and the ticket cannot be recovered. Would you pay $10 for another ticket?

In 1981, psychologists Amos Tversky of Stanford Universityand Daniel Kahneman of the University of British Columbia in Vancouver posed these questions to adult subjects and found that a new ticket is more likely to be purchased when money is lost rather than when an original ticket is lost. They theorized that the purchase of a new ticket is charged to a "psychological account." If a previous ticket is lost, the total cost of admission is $20, enough to dissuade a majority of people from buying a second ticket. The loss of money, however, is not specifically linked to the ticket price and has less effect on the decision.

Now, it appears that elementary-school children engage in asimilar decision-making process by grade 6, according to a report in the December 1986 PERCEPTUAL AND MOTOR SKILLS. Helene J. Krouse of Boston College School of Nursing presented four age-appropriate problems regarding money to 90 youngsters, 30 each from grades 1, 3 and 6. For instance, children were given $2 and told to pretend that they were going to buy a $1 ice cream cone. If they lost a dollar at the store would they buy ice cream with the other? Or, if they bought the cone and then dropped it on the ground, would they use the second dollar to buy another ice cream cone?

Most sixth graders answered yes to the first question and noto the second; children in the other two grades did not show this decision-making pattern.

A long-term study of children from grades 1 through 6 wouldhelp to illuminate the factors contributing to the development of "psychological accounting," says Krouse.
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Publication:Science News
Date:Feb 7, 1987
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