Economics or Pop Psychology?

AGAIN, I CAN'T REALLY DECIDE if this is economics or pop psychology? What does the "$1,000" figure matter in the first place? It's not like we can measure costs. One outcome is simply more costly (in a general sense, not just a purely monetary sense) than the other, based on their psychological speculations.

Big frickin' deal.

Source:
http://www.marginalrevolution.com/marginalrevolution/2005/09/why_you_buy_ins.html