Mental accounting and categorization

Abstract

Mental accounting is an oft-discussed type of decision framing in which individuals are hypothesized to form psychological accounts of the advantages and disadvantages of an event or option. Most discussions of mental accounting have focused on the consequences of framing decisions in this manner rather than on the processes underlying mental accounting. Close examination of these processes suggests they are the same as the processes described in categorization, schema, and script theories. The present manuscript provides insights into the processes hypothesized to underlie mental accounting. This is accomplished by documenting the conceptual equivalence of selected categorization and mental accounting principles and by using empirical data to illustrate the similarity of the principles. In doing so, a mental account is treated as a type of category.