Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats a Discount as a Gain
Episode 60 dives into the psychology of discounting: why a $20 item marked down to $15 feels like a win while a $15 item without a markdown feels neutral. Lucas and Luna explore the 'sale effect' through the lens of prospect theory and a real-world experiment by behavioral economists at the University of Chicago. They discuss how retailers anchor your perception with a reference price, why the same absolute saving feels different for cheap vs. expensive items, and how this bias can lead you to buy things you never wanted in the first place. The episode also touches on the…
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