Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
How Your Brain Treats Cashback as a Reward
Episode 79 of Behavioral Economics with Fexingo drills into why your brain processes cashback differently than a straight discount. Lucas and Luna explore the 'mental accounting' effect that makes you treat a $10 rebate as found money, while the same $10 off at checkout barely registers. They examine a 2024 study from the University of Chicago showing that cashback shoppers spend 18% more per trip than discount shoppers, and discuss how retailers like Target and Amazon have weaponized this cognitive quirk. The episode also touches on the 'decoupling' of reward from…
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