Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats a Subscription as a Sunk Cost Trap
Episode 98 of Behavioral Economics with Fexingo explores why we keep paying for subscriptions we barely use. Lucas and Luna dissect the psychology of the sunk cost fallacy in recurring payments, using the case of a typical $15 monthly gym membership that goes unused. They discuss how mental accounting separates subscription costs from other spending, the pain of canceling, and practical ways to override the bias. Drawing on Richard Thaler's work and a 2022 study from the Journal of Consumer Research, they explain why the average American now spends $237 per month on subscriptions—much of…
The skinny
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