Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why We Spend More With Cards Than Cash
In this episode, Lucas and Luna explore the decoupling effect — the psychological gap that makes spending feel less painful when we use credit cards instead of cash. They break down a classic 2001 study by Drazen Prelec and Duncan Simester, which found that NBA fans were willing to bid more than double for tickets when paying by card versus cash. The hosts connect this to modern payment apps like Apple Pay and Venmo, where friction is nearly zero, and discuss how fintech companies are now using behavioral economics to design payment interfaces that either encourage or discourage spending…
The skinny
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