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Consumers' choices are prey to subtle discrepancies that arise in cognitive accounting. Learning how and when you are prey to these discrepancies is an important step in improving your decision making. For example, contestants in a game show might choose a guaranteed $10 prize over a 50 percent chance of winning $20 despite the fact that the expected values are the same.
What is mental accounting and how does it impact consumer decision making?
How might a company take advantage of consumers' mental accounting? Give examples.
As a marketer, how might you frame certain decisions to benefit from the disparities that arise in one's cognitive accounting?
As a consumer, how would you avoid the pitfalls posed by the inequalities of one's cognitive accounting?
Write a paper in 3–5-pages in Word format. Apply APA standards to citation of sources.
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