Hedonic editing
We mentally bundle or split gains and losses to feel as good as possible about them.
What it means
Hedonic editing is the way people choose to combine or separate multiple outcomes in their mental accounts to maximize the pleasure or minimize the pain they derive from them. Guided by the shape of the prospect-theory value function, the affect-maximizing rules are to segregate gains (savor each separately, since the curve is concave), integrate losses (bundle them, since the curve is convex), integrate a small loss with a larger gain (cancel the sting), and segregate a small gain from a larger loss (a 'silver lining'). Whether people actually edit optimally is mixed, but the framework predicts how the timing and bundling of news and transactions affect satisfaction. It underlies practical advice such as separating gifts and combining bad news. Hedonic editing connects mental accounting directly to the geometry of the value function.
Examples
A retailer sends two separate refund checks rather than one combined check, because two separate gains feel better than a single larger one.
A driver waits and has the dented bumper and the failing exhaust fixed in one garage visit, because a single big bill hurts less than two separate ones a month apart.
Payroll takes the charity donation straight out of the monthly salary, where a small loss is swallowed by a larger gain; writing a cheque for the same amount feels far worse.
First described in Thaler (1985); Thaler & Johnson (1990).