Depreciation in mental accounting

1995 ◽  
Author(s):  
Chip Heath ◽  
M. G. Fennema
Keyword(s):  
Mental Accounting

Trans-personal mental accounting of gifts

1995 ◽  
Author(s):  
Suzanne O'Curry ◽  
Ching-Fan Sheu
Keyword(s):  
Mental Accounting

Turning Discounts Into Profits: Factors Influencing Online Purchasing Decisions for Hotel Add-on Items

2020 ◽  
pp. 193896552093539 ◽  
Author(s):  
Esther L. Kim ◽  
Sarah Tanford
Keyword(s):  
Process Model ◽  
Mental Accounting ◽  
Thinking Styles ◽  
Impulse Buying ◽  
Purchasing Decisions ◽  
Price Discount ◽  
Mediating Role ◽  
Factors Influencing ◽  
Impulse Buying Tendency

A hotel website exclusive discount is widely adopted by major chain hotels to increase the volume of direct bookings. Although the traditional purpose of a discount promotion is to attract customers to the business, this research suggests that a hotel website exclusive price discount can induce consumers’ additional spending. Principles of mental accounting and two thinking styles (analytic vs. holistic) predict different effects of a price discount and the add-on product type by individual thinking styles. A quasi-experiment investigated the effect of an unexpected discount, relatedness of add-on item to a hotel stay, and individual thinking styles on add-on purchasing. The mediating role of impulse buying was subsequently examined using the PROCESS model. The effect of a price discount and the relatedness of add-on item are significant for analytic thinkers, whereas holistic thinkers report higher likelihood to purchase add-on items regardless of relatedness. Holistic thinkers’ likelihood to purchase is enhanced through an impulse buying tendency. The findings provide further evidence for the role of individual differences in response to pricing tactics by suggesting that a price promotion increases add-on purchases for analytic thinkers, whereas promoting a sense of impulsiveness can be more effective for holistic thinkers.

Mental Money Laundering: A Motivated Violation of Fungibility

2020 ◽  
Author(s):  
Alex Imas ◽  
George Loewenstein ◽  
Carey K Morewedge
Keyword(s):  
Public Policy ◽  
Money Laundering ◽  
Consumer Choice ◽  
Mental Accounting ◽  
Moral Behavior ◽  
Corporate Behavior ◽  
Mixed Support ◽  
New Evidence ◽  
As If

Abstract People exploit flexibility in mental accounting to relax psychological constraints on spending. Four studies demonstrate this in the context of moral behavior. The first study replicates prior findings that people donate more money to charity when they earned it through unethical versus ethical means. However, when the unethically-earned money is first “laundered”––the cash is physically exchanged for the same amount but from a different arbitrary source—people spent it as if it was earned ethically. This mental money laundering represents an extreme violation of fungibility. The second study demonstrates that mental money laundering generalizes to cases in which ethically and unethically earned money are mixed. When gains from ethical and unethical sources were pooled, people spent the entire pooled sum as if it was ethically earned. The last two studies provide mixed support for the prediction that people actively seek out laundering opportunities for unethically earned money, suggesting partial sophistication about these effects. These findings provide new evidence for the ease with which people can rationalize misbehavior, and have implications for consumer choice, corporate behavior and public policy.

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