Glossary
Competence & Culture
Mental Accounting
Mental accounting is a term used in behavioral economics to refer to how people (including investors) see monetary value and monetary gain in a relative sense and derive pleasure from perceived value based on a set of individual and not necessarily always purely logical metrics. People think of their own money as divided into ‘different bits’, according to where it came from, what they plan to spend it on, and what methods of payment they use.