Topical Account

Topical Account

Reviewed by Faisal Zaidi

A mental account that ties a saving or cost to the item or topic it comes with and leaves other purchases out.

What it is

In the calculator and jacket problem the saving is framed as a drop in the calculator's price, from 15 dollars to 10, and the jacket does not enter the account. Kahneman's Thinking, Fast and Slow sets it beside the minimal account, which counts only the difference between options, and the comprehensive account, which sets the saving against all spending. It is drawn from work by Amos Tversky and Daniel Kahneman (1984).

In effect

In the article on why we drive across town to save a little, it is used to explain why the same five dollars is judged differently on a cheap and a dear item.

What it does not say

It is an account of how a saving is framed, illustrated by one problem. It does not say that everyone frames a saving this way, and other accounts, such as the minimal and comprehensive ones, describe other framings.

Sources

  1. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453-458.
  2. Kahneman, D. Thinking, Fast and Slow.