On the role of similarity in mental accounting and hedonic editing.

2021 ◽  
Author(s):  
Ellen R. K. Evers ◽  
Alex Imas ◽  
Christy Kang
Keyword(s):  
Mental Accounting ◽  
Hedonic Editing

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.

The Effect of Payment Schemes on Inventory Decisions: The Role of Mental Accounting

2013 ◽  
Vol 59 (2) ◽  
pp. 436-451 ◽  
Author(s):  
Li Chen ◽  
A. Gürhan Kök ◽  
Jordan D. Tong
Keyword(s):  
Mental Accounting ◽  
Payment Schemes ◽  
Inventory Decisions

Cause related marketing: The role of mental accounting, price and product type

2008 ◽  
Author(s):  
Enrico Rubaltelli ◽  
Ilaria Baghi ◽  
Marcello Tedeschi ◽  
Rino Rumiati
Keyword(s):  
Mental Accounting ◽  
Product Type ◽  
Cause Related Marketing

How reward uncertainty influences subsequent donations: The role of mental accounting

2021 ◽  
Vol 132 ◽  
pp. 383-391
Author(s):  
Haijiao Shi ◽  
Rong Chen ◽  
Xiaobing Xu
Keyword(s):  
Mental Accounting

The Effect of the Timing and Direction of Capital Gain Tax Changes on Investment in Risky Assets

2012 ◽  
Vol 88 (2) ◽  
pp. 499-520 ◽  
Author(s):  
Diana Falsetta ◽  
Timothy J. Rupert ◽  
Arnold M. Wright
Keyword(s):  
Mental Accounting ◽  
Data Availability ◽  
Capital Gain ◽  
Tax Law ◽  
Risky Assets ◽  
Risky Investment ◽  
Hedonic Editing ◽  
Tax Changes

ABSTRACT This study examines the effect of timing (gradual versus immediate) and direction (tax increase or decrease) of a tax change on taxpayer behavior. Specifically, we focus on capital gain tax changes and preferences for investment in riskier assets. We run an experiment with 117 participants who allocate investment dollars between two funds of differing risk. Drawing on mental accounting and hedonic editing (Thaler 1985; Thaler and Johnson 1990), we posit that a tax decrease (a “gain”) implemented gradually over several years will result in a greater increase in risky investment once the decrease is fully implemented than when the tax change is implemented all at once. In contrast, once a tax increase (a “loss”) is fully implemented, a smaller decrease in risky investment will result when the change occurs all at once rather than gradually. Our findings support these expectations, suggesting that the manner of implementing a tax law change may impact decisions. Data Availability: Contact the authors.

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