Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats a Budget Cap as a Target to Hit
Episode 111 dives into the 'what the hell effect' — the behavioral bias where setting a budget cap actually encourages overspending. Using a 2025 study from the Journal of Consumer Research, Lucas and Luna explore how a caffeine-subscription company saw 23% higher consumption when users were given a daily spending limit. They break down the psychology: the cap becomes a license to consume up to it, and once you hit it, you feel you've already failed so you might as well splurge. They discuss real-world implications for personal finance apps, corporate expense policies, and even…
The skinny
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