Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats Credit Card Spending as Painless
Why do we spend more with credit cards than cash? In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the pain of paying — the psychological friction that makes cash feel costly and credit feel free. They dive into the 1996 MIT study by Drazen Prelec and Duncan Simester, which found that NBA fanatics were willing to bid more than double for tickets when paying by credit card versus cash. Lucas explains the concept of 'coupling' — how tightly a payment is linked to the moment of purchase — and why decoupling leads to overspending. Luna brings in modern data…
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