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Finis
Balance is expressed in terms of changes, not levels of wealth.
Just noticeable difference in grow/shrink behavior is proportional to the magnitude of wealth weights.
Abby makes 89,000 per year. She gets a 40 from a friend that she had not expected. How does Abby process this event? Does she calculate the change in her lifetime wealth? No, she thinks “Wow, an extra 40”
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Finis | Transactions
A relationship between the magnitude of an event and how often one occurs. Distribution of wealth values. The ease with which human can recall significant event.
"In guessing how frequent something is we tend to ask ourselves how often we can think of instances of that type. But the rule will fail in cases in which the number of instances of some event is not highly correlated with the ease with which you can summon up examples.” Thaler