Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
How Rebates Make Us Overpay
In this episode, Lucas and Luna explore the rebate trap: why a promised cash-back deal makes us spend more than we otherwise would. They dig into the psychology of mental accounting and the 'endowment effect' for money not yet received, using the classic example of mail-in rebates on electronics and how retailers bank on our forgetfulness. They also touch on a 2018 study that found only about 40 percent of consumers actually redeem rebates, and discuss how the same psychological mechanism shows up in everything from utility discounts to employer 401(k) matches. Lucas and Luna break…
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