Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
The Peak-End Rule and How You Remember Your Spending
In this 150th episode of Behavioral Economics with Fexingo, Lucas and Luna explore how memories of experiences are shaped by the peak-end rule—and what that means for how we spend and save. They dig into Daniel Kahneman's famous cold-pressor experiment, where participants preferred a longer painful experience that ended less painfully, and connect it to why a terrible vacation can be redeemed by a great final dinner. They discuss how our recollection of financial decisions is biased by peaks and endings, influencing everything from investing to subscription cancellations. With concrete…
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