◐ Behavioral
◆ The PatternTreating money differently based on its source or intended use (Richard Thaler).
Mental accounting (Richard Thaler, 1985) — treating money differently based on arbitrary categories.
Examples:
• House money effect: Profits from winning trades are risked more freely — "it's house money"
• Found money: A tax refund or bonus spent more frivolously than salary
• Separate buckets: "My retirement account" vs. "my trading account" — but it's all your wealth
Money is fungible. A dollar of profit = a dollar of salary = a dollar of savings.
• House money effect: Profits from winning trades are risked more freely — "it's house money"
• Found money: A tax refund or bonus spent more frivolously than salary
• Separate buckets: "My retirement account" vs. "my trading account" — but it's all your wealth
Money is fungible. A dollar of profit = a dollar of salary = a dollar of savings.
Pattern bridge: Treating money differently based on its source or bucket. In ML, batch normalization per-group treats each layer’s activations as separate accounts. In statistics, Simpson’s paradox shows how grouping changes conclusions.