Narrow bracketing
Treating each decision in isolation rather than as part of the larger portfolio of choices.
What it means
Narrow bracketing is the tendency to evaluate decisions one at a time, in small mental brackets, rather than considering their combined consequences. When choices are bracketed narrowly, loss aversion and diminishing sensitivity apply within each tiny window, producing risk attitudes and trade-offs that look incoherent when the choices are viewed together. The classic demonstration shows people making a pair of simultaneous gambles that, taken individually, seem sensible but jointly yield a dominated combined distribution. Narrow bracketing underlies myopic loss aversion, the failure to diversify, and inconsistent risk-taking across small stakes. It is the conceptual opposite of broad bracketing and a key reason aggregation and reframing can improve decisions.
Examples
Offered two gambles separately, a person rejects each; shown that the pair together yields a strictly better combined bet, they realize their per-gamble framing led them astray.
Someone budgeting envelope by envelope skips a cheap dental checkup to protect this month's health envelope, then pays for a crown next year out of a far bigger bill.
A worker who picks lunch each morning takes whatever appeals that day and ends the week with five near-identical meals; choosing all five at once would have produced variety.
First described in Read, Loewenstein & Rabin (1999); Tversky & Kahneman (1981).