Thursday, March 1, 2007

What is Meant by the Term "Cheapskate"?

A cheapskate is someone values their possessions (money and otherwise) way beyond what they are actually worth, and is therefore highly reluctant to surrender any of it -- even if, by objective standards, they would materially gain.

It's actually an extreme case of the "endowment effect" that goes well beyond a normal person's apprehension over discarding, say, a shirt that hasn't been worn in years.

A cheapskate crosses the line when someone else is denied an opportunity to gain from a trade. For example, if you keep an old book around collecting dust, no one else is really affected much. But if the book has a unique feature (out-of-print), and you have the opportunity to trade it for something that is even more valuable to you, then you are depriving yourself of a material gain -- and you area also depriving someone else of having that book that he might really want.

Another example: You have plans to have dinner with someone but cannot bear the thought of paying, say, two dollars for a drink -- and so, you instead insist on eating in a roach-infested dive "on principle". In fact, the only principle is that you have trouble parting with fifty cents, even if it means a risk of poisoning yourself and the other person. The "principle" is exposed as a hoax when you accept the other person's offer to buy the drink for you.

And at that point, you are thought of as a "cheap son of a bitch".


Lexcen said...

Isn't is common for a cheapskate to die in poverty, only to be discovered that there is a fortune buried underneath his house?

21 said...

I've heard stories like that; they never "cash in" their fortune...