Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Ananda Ganguly

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This paper examined the presence and scope of mental accounting biases for peer- to-peer digital-payment systems (Venmo, PayPal, and Zelle) that have gained popularity in recent years. Payment mechanism related biases have implications for both consumers and retailers. The experimental study in this paper looked at different aspects of biases including how participants evaluate and account for money transferred through peer-to- peer digital-payment, if participants treat this money as completely fungible, and if treatment of this money is affected by demographic variables. Participants in the study were split into two treatments that differed only in regard to the account (peer-to-peer versus checking account) to which a $375 windfall was sent. Participants were then asked to select a payment mechanism for a series of common scenarios. Participants who received their windfall via a transfer to their peer-to-peer account were significantly more likely to make payments via the peer-to-peer payment mechanism and spent significantly more on tips and donations than the participants who received their windfall via a deposit to their checking account. These results indicate that use of peer-to-peer digital-payment systems can lead to mental accounting biases, namely increased consumption and spending.