Final answer:
Jack's habit of setting aside a specific amount from his paycheck for eating out is an example of mental accounting, which involves classifying and allocating money into different mental categories based on its intended purpose.
Step-by-step explanation:
Mental Accounting
Jack's habit of automatically setting aside a specific amount from his paycheck for eating out is an example of mental accounting.
Mental accounting refers to the practice of classifying and allocating money into different mental categories based on its source or intended purpose. In this case, Jack has mentally designated a portion of his paycheck as disposable income for dining out.
This behavior is an example of the cognitive bias known as imperfect judgment, where individuals make financial decisions based on subjective criteria rather than objectively optimizing their financial outcomes.