Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats Loyalty Points as Fake Money
Episode 78 of Behavioral Economics with Fexingo digs into the psychological illusion of loyalty points and airline miles. Lucas and Luna explore why people spend points more recklessly than cash, even redeeming at terrible rates. They discuss the 'points illusion' from a 2023 University of Toronto study showing that consumers spend 2.5x more when paying with points versus cash. The hosts break down the mental accounting that treats points as 'found money,' the pain of paying being lower, and how companies like Starbucks and Delta exploit this bias. Lucas draws on a real…
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