Scientific Definition
The mental zero from which gains and losses are judged. Move it, and the same outcome changes meaning.
Plain-English Definition
The mental zero from which gains and losses are judged. Move it, and the same outcome changes meaning.
Feynman Explanation
$100 is a windfall to one person and a pay cut to another. Same hundred bucks.
Core Principle
The mental zero from which gains and losses are judged. Move it, and the same outcome changes meaning.
Mechanisms
Pending editorial review.
The mental zero from which gains and losses are judged. Move it, and the same outcome changes meaning.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Pricing anchors, comp benchmarks, performance review baselines.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
$100 is a windfall to one person and a pay cut to another. Same hundred bucks.
Examples
- Prospect theory's foundation: value is defined over changes from a reference, not final wealth.
- Pricing anchors, comp benchmarks, performance review baselines.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Name the reference point explicitly before negotiating. Whoever sets it usually wins.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Name the reference point explicitly before negotiating. Whoever sets it usually wins.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
We judge outcomes relative to a reference point, not in absolute terms.
How will I feel about this in 10 minutes / 10 months / 10 years?
Inattention or forgetfulness caused by low attention, hyperfocus, or distraction.
Forgetting to compare an offer with the next-best alternative.
Outcomes that could have happened but did not.
Overthinking a situation so that decision-making stalls.
The first number on the table silently sets the range for every number after it.
Tversky & Kahneman's classic: identical outcomes flip from 'risk averse' to 'risk seeking' when framed as lives saved vs. lives lost.
Our perception is shaped by what we selectively pay attention to.
Favoring suggestions from automated systems over conflicting human judgment.
A color appears different depending on adjacent colors.
Decisions are constrained by available information, cognitive limits, and time.