Mental Accounting

Lesson 8 of 14 • 0 upvotes • 11:47mins

Rakesh Sud

Financial Accounting: Impact of Behavioural Sciences – Mental Accounting etc Mental Accounting, Behaviors etc: Associating a stock with its purchase price.If you are engaging in mental accounting You find it is difficult to sell a stock at a price lower than your purchase price. If you sell a stock at a loss It may be hard for you to think that purchasing the stock in the first place was correct.You may feel this way even if the decision to buy was actually a very good decision.A further complication of mental accounting is loss aversion