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The Incentives Lab
HBT-COG-0465 · Dimension COG · Cognition

Mental Accounting

We treat money differently depending on which bucket it's in.

Decision Bias·Cognitive Bias·Grade B·draft· enriching…

Scientific Definition

We treat money differently depending on which bucket it's in.

Plain-English Definition

We treat money differently depending on which bucket it's in.

Feynman Explanation

The 'innovation budget' is real money everywhere except where it gets spent.

Core Principle

We treat money differently depending on which bucket it's in.

Mechanisms

Psychological

We treat money differently depending on which bucket it's in.

Behavioral Economic

Pending editorial review.

Neurological

Pending editorial review.

Evolutionary

Pending editorial review.

Sociological

Pending editorial review.

Computational

Pending editorial review.

Systems

Pending editorial review.

Inputs (Triggers)

Pending editorial review.

Outputs (Behaviors)

Pending editorial review.

Behavioral Signature

The 'innovation budget' is real money everywhere except where it gets spent.

Examples

Everyday
  • Departments hoard budgets in silos while company-wide returns suffer.
Modern (Organizational)
  • Capital allocation distorted by bucket, not by best use.
Historical

Pending editorial review.

Famous Experiments

Pending editorial review.

Design Principles

  • Zero-base across buckets. Capital is fungible — make budgets behave that way.

Measurement Approaches

Pending editorial review.

Evidence

Evidence Grade
B (A strongest → E speculative)
Replication
★★★☆☆
Intervention Confidence
3 / 5
Consensus
Pending editorial review (HBT v1.0 auto-seed).
Limitations
Pending editorial review (HBT v1.0 auto-seed).
Open Research Questions

Pending editorial review.

Primary References

Pending editorial review.

Signature Section

The Perverse Incentive Lens™

How this behavior is exploited — and how to redesign around it.

Exploitation
AI investment trapped in IT line items, starved of business-unit funding.
Amplifying Incentives
Capital allocation distorted by bucket, not by best use.
Org Failure Modes
Capital allocation distorted by bucket, not by best use.
Societal Failure Modes
Pending editorial review (HBT v1.0 auto-seed).
Ethical Considerations
Pending editorial review (HBT v1.0 auto-seed).
Redesign Strategies
Zero-base across buckets. Capital is fungible — make budgets behave that way.
Diagnostic Questions
  • Zero-base across buckets. Capital is fungible — make budgets behave that way.
Warning Signs

Pending editorial review.

Red Flags

Pending editorial review.

Intervention Playbook
Individual
Zero-base across buckets. Capital is fungible — make budgets behave that way.
Team
Pending editorial review (HBT v1.0 auto-seed).
Organization
Pending editorial review (HBT v1.0 auto-seed).
Policy
Pending editorial review (HBT v1.0 auto-seed).
AI Implications
Detection
AI investment trapped in IT line items, starved of business-unit funding.
Measurement
Pending editorial review (HBT v1.0 auto-seed).
Mitigation
Pending editorial review (HBT v1.0 auto-seed).
Responsible Use
Pending editorial review (HBT v1.0 auto-seed).

Interactive Mini Network

Click any neighbor to re-center the graph and follow the threads of connection.

HBT-COG-0465 · COG
Mental Accounting
MAABAction BiasAHAffect HeuristicABAnchoring BiasDEDecoy EffectDEDefault EffectEEEndowment EffectFEFraming EffectHDHyperbolic DiscountingIEIKEA EffectIBInformation Bias

Knowledge Graph Neighbors

Version History

v1.1.0 · 2026-06-28Initial auto-seed from corpus.