IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i4p2415-2427.html
   My bibliography  Save this article

Mental accounting, heuristics, and the second‐best: Solving the calculator‐jacket puzzle

Author

Listed:
  • Elias L. Khalil

Abstract

This paper conceives mental accounting along Kahneman's “mental economy,” specifically as a heuristic. This mental‐accounting‐as‐heuristic conception allows us to solve the calculator‐jacket puzzle. The opportunity cost of time is not constant but roughly varies with the variation of the item's value. As the value of the item rises, the decision maker (DM) should be more attentive. However, the measurement of the opportunity cost of time at each point of purchase is cognitively costly. To reduce such cost, the DM adopts a heuristic, the item's price itself, as a rough proxy of the varying opportunity cost of time.

Suggested Citation

  • Elias L. Khalil, 2024. "Mental accounting, heuristics, and the second‐best: Solving the calculator‐jacket puzzle," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2415-2427, June.
    • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2415-2427
    DOI: 10.1002/mde.4135
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4135
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.4135?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2415-2427. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.