More than 15 years ago, Van Boven and Gilovich (Journal of Personality and Social Psychology, 85, 2003, 1193) presented evidence that experiential purchases make people happier than material purchases once consumers have covered their basic needs. This experiential advantage has attracted significant attention from researchers in the fields of social and consumer psychology. In this article, we review the literature on this subject. We first define the constructs of experiential and material purchases, and contrast them with previous, related constructs. We then identify and review the different mechanisms that appear to underlie the experiential advantage.Finally, we examine evidence of systematic differences in how people make decisions about material and experiential purchases, focusing on differences in how consumers process information and evaluate options prior to making a purchase.

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An enduring question in the field of judgment and decision making is when people are likely to choose on the basis of intuition and when they are likely to pursue a more deliberative decision strategy. Here, we attempt to shed light on that question by examining whether people tend to weight intuition more heavily when making experiential purchases, and to weight deliberation more heavily when making material purchases. Results from seven studies indicate that they do. In Study 1 (and a replication), participants expressed an explicit preference for choosing experiential purchases intuitively and material purchases analytically. In Study 2 (and a replication), participants anticipated experiencing more regret after going against reason for material purchases and going against intuition for experiential purchases. Participants in Study 3 who were asked to think about an experiential purchase wanted to see the relevant information presented by alternative, which facilitates intuitive/holistic processing, more than did those who were asked to consider a material purchase. In two additional studies, participants who were induced to think intuitively chose experiential purchases more often (Study 4) and reported a higher willingness to pay for them (Study 5) compared with participants induced to think analytically. Copyright © 2016 John Wiley & Sons, Ltd.

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Building on past research on judgment anchoring, we investigate the effect of price information on consumers' choice of denomination when making a purchase. Across seven experiments, including two in the field (N = 4,020), we find that people tend to purchase with denominations that are the same as the product prices. They use larger denominations for higher priced products that are priced at the value of the denomination held, and smaller denominations for lower priced products that are priced at the value of the smaller denomination held. The effect is not explained by storage or purchase convenience. We propose the "price-denomination effect" is driven by consumers anchoring on product price and then choosing the denomination that matches the anchor. The effect replicates across participants from different continents (United States, Europe, and Africa) and samples (online panelists, and actual consumers), as well as prices in different currencies (United States $, €, and Nigerian Naira). We further demonstrate that people's preference for denominations also affects the choice of the form of payment used: cash versus card. Consumers are more likely to use cash (vs. card) when product price is exactly the same as a denomination held. We conclude with a discussion of theoretical and practical implications.