Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend

Episode 80 of Behavioral Economics with Fexingo explores precommitment contracts—binding yourself in advance to override future impulses. Lucas and Luna break down how the tool works using the classic example of Christmas savings clubs and modern apps like StickK, where people stake money on achieving a goal or losing it. They discuss why self-control is harder when rewards are immediate and costs...

Episode 79 of Behavioral Economics with Fexingo drills into why your brain processes cashback differently than a straight discount. Lucas and Luna explore the 'mental accounting' effect that makes you treat a $10 rebate as found money, while the same $10 off at checkout barely registers. They examine a 2024 study from the University of Chicago showing that cashback shoppers spend 18% more per trip...

Episode 78 of Behavioral Economics with Fexingo digs into the psychological illusion of loyalty points and airline miles. Lucas and Luna explore why people spend points more recklessly than cash, even redeeming at terrible rates. They discuss the 'points illusion' from a 2023 University of Toronto study showing that consumers spend 2.5x more when paying with points versus cash. The hosts break dow...

In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the concept of 'the pain of paying' — the visceral discomfort we feel when parting with money. Drawing on research from MIT and Carnegie Mellon, they discuss how payment method, timing, and transparency affect our spending decisions. They examine why cash feels more painful than credit cards, why prepayment can reduce spe...

Episode 76 of Behavioral Economics with Fexingo explores why your brain accepts higher prices for identical products depending on the store you're in. Lucas and Luna unpack the concept of transaction utility — how we judge a deal not just by absolute price but by the perceived fairness of the price relative to a reference point. Using examples like a $4 soda at a hotel minibar versus a convenience...

In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the mental accounting bias known as the form-of-payment effect. They break down a 2020 study from the University of Pennsylvania showing that people spend up to 83% more when using credit cards versus cash for identical purchases. The hosts discuss why cash feels like a real loss while credit feels abstract, how this bias...

Why does opening a credit card statement or seeing a receipt feel worse than the actual purchase? In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore receipt aversion, a cognitive bias that makes us dislike seeing the total of what we've spent. They dive into a 2023 experiment by researchers at the University of Chicago and the University of Toronto that found people were...

Why do we feel worse returning an item than we did buying it? This episode digs into the psychological concept of 'psychological ownership' and the endowment effect in reverse. Lucas and Luna explore a 2023 study from the University of Texas, where shoppers who bought a blender for $50 felt a sting of loss when offered a $45 refund — even though they never actually owned the money. They discuss ho...

Lucas and Luna explore the psychology of gift cards — why recipients often spend them differently than cash, and why retailers love them. They dive into the 'mental accounting' theory of Richard Thaler, the $23 billion in unspent gift card value sitting on balance sheets as of early 2026, and a surprising experiment showing people are willing to pay a premium for a gift card over cash. The episode...

Episode 71 of Behavioral Economics with Fexingo explores the sunk cost fallacy and its powerful grip on subscription renewals. Lucas and Luna use the case of a $29.99/month gym membership to show how our brains double down on past investments, even when the rational choice is to cancel. They contrast gym behavior with streaming services, where companies exploit this bias through auto-renewal and a...

Episode 70 of Behavioral Economics with Fexingo digs into the compromise effect: why consumers consistently choose the mid-priced option, even when it makes no rational sense. Lucas and Luna explore a classic 1992 study by Simonson and Tversky involving microwave ovens, then connect it to modern examples like subscription tiers and car models. They unpack the psychological mechanism — extremeness...

Why do movie theaters sell giant popcorn for just a dollar more than medium? It's not about value — it's about a cognitive quirk called the decoy effect. In this episode, Lucas and Luna break down how a deliberately inferior third option can make you pick the most expensive choice without realizing it. They walk through classic experiments by Dan Ariely, real-world pricing strategies from The Econ...

Why do we walk away from a deal that benefits us just because it feels unfair? In this episode, Lucas and Luna explore the ultimatum game, a classic behavioral economics experiment that reveals how the brain's fairness circuits override pure self-interest. They discuss a 2023 meta-analysis of 79 studies showing that people reject offers of 20% or less roughly half the time, even when rejecting mea...

Why does a countdown timer make you buy something you never wanted? Behavioral economist Dan Ariely's famous 'high school reunion' experiment showed that people will pay a premium to avoid a deadline — even when the deadline is meaningless. This episode explores how scarcity cues (limited time, limited stock, limited access) override rational decision-making. Lucas and Luna break down the psycholo...

Episode 66 of Behavioral Economics with Fexingo. Lucas and Luna unpack the 'scarcity heuristic'—why your brain treats a flash sale as more urgent than a standing discount, even when the savings are identical. They dissect a real-world case: how a major online retailer boosted conversion by 340 percent by switching from 'Save 20 percent' to '24-hour sale: Save 20 percent.' They explore the evolutio...

Episode 65 of Behavioral Economics with Fexingo explores the placebo effect in economics — how expectations alone can shape financial outcomes. Lucas and Luna examine a real-world experiment from the University of Chicago where students given a 'high-performing' investment portfolio actually earned higher returns than those told their portfolio was average, even though both groups held the identic...

Episode 64 of Behavioral Economics with Fexingo dives into probability weighting — why your brain treats a 1-in-100 chance as much more likely than it actually is. Lucas and Luna dissect the classic Kahneman and Tversky research, then turn to a real-world example: why people overpay for lottery tickets even when the expected value is negative. They explore how this bias drives decisions in insuran...

Lucas and Luna dive into social proof — why we look to others to decide what's worth buying. They explore the classic Asch conformity experiments, Solomon Asch's 1950s line-judgment study showing how group pressure warps individual perception. They connect it to modern examples: restaurant Yelp ratings, Amazon's 'Customers who bought this also bought' algorithm, and the viral rise of Stanley cups...

In this episode, Lucas and Luna explore the Ikea effect — the cognitive bias where people overvalue products they partially assemble themselves. Using Ikea's iconic flat-pack furniture as the central case, they trace the bias from a 2011 Harvard study by Michael Norton, Daniel Mochon, and Dan Ariely to its modern-day applications in software customization, meal kit services, and even corporate onb...

Episode 61 of Behavioral Economics with Fexingo explores the endowment effect through a famous experiment with chocolate bars and coffee mugs. Lucas and Luna unpack why we demand more to give up something we own than we'd pay to acquire it—and how this bias distorts everything from housing markets to salary negotiations. They discuss the original 1990 Kahneman, Knetsch, and Thaler study, the role...

Episode 60 dives into the psychology of discounting: why a $20 item marked down to $15 feels like a win while a $15 item without a markdown feels neutral. Lucas and Luna explore the 'sale effect' through the lens of prospect theory and a real-world experiment by behavioral economists at the University of Chicago. They discuss how retailers anchor your perception with a reference price, why the sam...

In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the spotlight effect—our tendency to believe others are paying far more attention to us than they actually are. They anchor the discussion in a 2000 study by Thomas Gilovich and colleagues at Cornell, where students wore a Barry Manilow T-shirt into a room and dramatically overestimated how many peers noticed. The hosts b...

Episode 58 of Behavioral Economics with Fexingo dives into the anchoring effect — how an arbitrary first number can warp every decision that follows. Lucas and Luna use a classic 1996 study by Tversky and Kahneman where participants spun a rigged wheel of fortune, then guessed the percentage of UN countries in Africa. The spin's outcome, random as it was, predicted their guesses. We trace the effe...

Why do we stick with the default option, whether it's a 401(k) enrollment plan, a phone settings screen, or a brand of toothpaste we picked years ago? This episode of Behavioral Economics with Fexingo dives into the default effect — our brain's powerful tendency to favor the path of least resistance. Lucas and Luna use a striking real-world case: the difference in organ donor consent rates between...

Episode 56 of Behavioral Economics with Fexingo digs into the 'house money effect' — the behavioral bias that makes us spend unexpected gains more freely than earned income. Lucas and Luna anchor the discussion in a 2022 experiment where participants given a $50 windfall gambled 40% more than those who earned the same amount through work. They explore how casinos exploit the effect with chips and...