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On the Optimality of Mental Accounting

Jarrod Burgh, Emerson Melo, Matthew Shum · 2026 · arXiv (Cornell University)

DOI: 10.48550/arxiv.2610.12587 · cited by 0 works (OpenAlex) · open-access PDF

Chinese

心理会计通常是通过自我控制,并通过可分离的偏好来解释两个阶段的预算。我们提出了基于卖家的市场力量的第三个解释。承诺在一类中花费一定数量的美元的消费者有单位弹性的需求,所以该类别的卖家没有通过限制数量获得任何东西。相反,瞄准固定的物理数量的消费者有完全不弹性的需求,这种情况是垄断者可以利用的。我们描述了消除卖家的激励价格的承诺,并表明固定美元预算是最不具限制性的。

Machine translation (Meta M2M100); the English original follows.

Abstract

Mental accounting is usually explained by self-control, and two-stage budgeting by separable preferences. We propose a third explanation based on sellers' market power. A consumer who commits to spend a fixed number of dollars in a category has unit-elastic demand, so a seller in that category gains nothing by restricting quantity. A consumer who instead targets a fixed physical quantity has perfectly inelastic demand, a case that a monopolist can exploit. We characterize the commitments that remove a seller's incentive to mark up prices, and show that the fixed dollar budget is the least restrictive. We then show that what matters is budget rigidity rather than separability of preferences. A consumer who re-optimizes her category budget when prices change is insulated from market power only if categories are substitutes; a rigid budget insulates her in every case. Mental accounting can therefore be read as a commitment device against markups, a rationale that is separate from the self-control motive in the existing literature.

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Topics: Mental accounting, Economics, Liberian dollar, Incentive, Budget constraint, Microeconomics

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