You went to store X, next to your house, to buy a new computer. When you got there, the salesperson told you that the product costs R$2,000.00, but at another franchise of the brand on the other side of the city, the same computer costs R$1,500.00. What do you do? Most people choose to cross the city to save R$500.00.
Now, in a different scenario, imagine that you went to a dealership to buy a car that costs R$50,000.00. The salesperson informs you that the same car costs R$49,500.00 at a dealership on the other side event planner email list of town. Would you drive across town for that discount? Most people choose not to make that trip.
in the case of the computer, the value represents ¼ of the total value of the product;
compared to the price of the car, the value represents only 1% of the total value of the product.
Even in completely different scenarios, the discount is the same : R$500.00!
So stop and think: why are people willing to move for the discount on the computer and not for the discount on the car? It's all implicit in the relativity of money!
Mental accounting
The title of this article was not chosen at random, it was inspired by Mental Accounting — this concept explains yet another “bug” in our mind , since, because of it, we often end up getting into financial trouble.
Let's go back to the casino example: George (an example used by the authors in the book) decided to spend a weekend in Las Vegas — early in the morning of the first day, he chose to make his own coffee in the room's coffee maker, as he thought it was absurd to pay $4.00 for the hotel buffet.
That evening, he went to a casino, swiped his credit card, and bought $200.00 worth of chips (each worth $5.00). Overjoyed at being on a lucky streak, he tipped a chip to a very helpful waitress who was serving him.
Now, think about it: why did George choose not to pay for a coffee, but had no problem giving a higher value token as a tip?
This happens because our mind segments expenses into compartments: there is “serious money” (like paying bills, food, etc.) and money that seems fun, which is generally processed by our brain as a source of pleasure — that is, it does not generate pain.
Malleable and Accounting Mental Accounting