Malleable Mental Accounting: The Effect of Flexibility on the Justification of Attractive Spending and Consumption Decisions

Cheema, Amar; Soman, Dilip

doi:10.1207/s15327663jcp1601_6

Cited by 213 publications

(200 citation statements)

References 33 publications

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“…In the experiment, participants had to imagine that, following mental budgeting principles, they had spread their monthly income among different categories (clothing, food, entertainment, and a category for further expenses) and had allotted $75 to the category "clothing" for the following month. Cheema and Soman (2006) successfully applied a similar approach.…”

Section: Methodsmentioning

confidence: 99%

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How price increases affect future purchases: The role of mental budgeting, income, and framing

Homburg

Koschate

Totzek

2009

Psychology and Marketing

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This article suggests that mental budgeting processes provide a further understanding of how and to what degree price increases negatively affect a customer's future purchase behavior in a particular category of expenses. Furthermore, the authors analyze how customer income and different price presentation tactics alter this reaction. Results of two experimental studies using both students and non-students show that customer income attenuates the negative effect of a price increase on the likelihood of a future purchase in a particular expense category. As an underlying mechanism, the influence of customer income on future purchase behavior is partially mediated by the degree to which customers engage in mental budgeting. Moreover, mental budgeting strengthens the negative effect of a price increase on a future purchase in the same category of expenses, whereas it does not alter the effect of a price increase on a future purchase in another category. Finally, the framing of a price increase as a percentage versus in absolute terms leads to a lower likelihood of a future category purchase.

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Section: Methodsmentioning

confidence: 99%

“…Prior studies in the context of mental budgeting have used similar measures (e.g., Cheema & Soman, 2006;Henderson & Peterson, 1992;Soman, 2001). For subsequent analyses, the item was reverse coded.…”

Section: Methodsmentioning

confidence: 99%

How price increases affect future purchases: The role of mental budgeting, income, and framing

Homburg

Koschate

Totzek

2009

Psychology and Marketing

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“…Shoppers recognize the ability of retailers to generate immediate desires and they try to limit this effect by activating some "self-control strategies", which are strategies oriented to control impulsiveness in order to be less conditioned by instore stimuli (Hoch & Loewenstein, 1991;Cheema & Soman, 2006). In particular, in literature, two are the main activities that consumers realize in order to prevent deviant behaviour: reduction of desire and increase of willpower (Hoch & Loewenstein, 1991;Cheema & Soman, 2006).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…In particular, in literature, two are the main activities that consumers realize in order to prevent deviant behaviour: reduction of desire and increase of willpower (Hoch & Loewenstein, 1991;Cheema & Soman, 2006). Self-control is the result of a psychological conflict between desire and willpower, considered as the strategy used to reduce cravings.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Does Shopping Preparation influence Consumer Buying Decisions?

Bellini¹,

Cardinali²,

Grandi³

2016

IBR

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Changes in consumers" environment, specifically the economic crisis and the growing penetration of digital technologies, have produced significant changes in shopping habits, designed to gradually reduced the effectiveness of in-store marketing levers in influencing shopping behaviour. On one hand, due to the global economic downturn and the associated diminished disposable income, more shoppers are now searching more information before entering a store and evaluating more alternatives before to decide where and what to shop. On the other hand, the deep penetration of technological developments, such as digital media and mobile devices, among the population, has opened up new opportunities to influence shopper attitudes and behaviour in the retail environment. A new scenario seems to be opening up where more planning and preparation for shopping is carried out before customers entering the store. In this new environment, to formulate and execute effective shopper marketing strategies, managers need to better understand the complete picture of how online, offline, mobile and in-store marketing influence shoppers in the path-to-purchase-and-beyond cycle. Starting from recent research avenues, our work intends to explore the relationship between pre-shopping behaviour and shopping behaviour in-store, with the aim to understand how pre-trip activities have influenced shopping behaviour in-store. In order to get this purpose, we conducted a survey in three stores belonging to a leading Italian grocery retailer. Shoppers were intercepted in front of the display, when the chosen product was placed in the shopping cart. Through a structured questionnaire, respondents were asked about the nature of the purchase (planned vs unplanned) and the degree of out-of-store preparation (number and type of activity carried out). Data were processed using SPSS statistical software. The degree of grocery shopping preparation is found to influence shopper behaviour inside the store in terms of planned/impulse buying: the higher is the degree of preparation, the greater is the tendency to plan purchases and the lower is the tendency to make impulse purchases. Our findings could suggest retailers and manufacturers new ways to innovate the practice of shopper marketing, considering that marketing levers cannot still affect consumers" decisions in-store as in the past.

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“…they are also driven by other-regarding preferences like fairness or reciprocity when making decisions. Many examples of such behavior exist in the context of consumption activities: heuristics and mental accounts influence product choice (Cheema and Soman 2006), prosocial behavior affects donations or volunteering (Meier and Stutzer 2008), and status and habits drive consumption (Lindbeck 1997). Behavioral economists have opened the way to alternative models of behavior which adjust or replace the rational, maximization model and its predictions, such as prospect theory, hyperbolic discounting, heuristics, habitual behavior, status seeking, self-identity concerns, and theories involving social preferences.…”

Section: An Overview Of Bounded Rationality and Other-regarding Prefementioning

confidence: 99%

Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences

Gsottbauer

Bergh

2010

Environ Resource Econ

114

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Established environmental policy theory is based on the assumption of homo economicus. This means that people are seen as fully rational and acting in a self-regarding manner. In line with this, economics emphasizes efficient policy solutions and the associated advantages of price incentives. Behavioral economics offers alternative, more realistic views on individual behavior. In this paper we investigate opportunities to integrate bounded rationality and other-regarding preferences into environmental policy theory to arrive at recommendations for more effective policies. For this purpose, we will address decisions made under risk and uncertainty, intertemporal choice, decision heuristics, other-regarding preferences, heterogeneity, evolutionary selection of behaviors, and the role of happiness. Three aspects of environmental policy are considered in detail, namely sustainable consumption, environmental valuation and policy design. We pay special attention to the role of non-pecuniary, informative instruments and illustrate the implications for climate policy.

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Malleable Mental Accounting: The Effect of Flexibility on the Justification of Attractive Spending and Consumption Decisions

Cited by 213 publications

References 33 publications

How price increases affect future purchases: The role of mental budgeting, income, and framing

How price increases affect future purchases: The role of mental budgeting, income, and framing

Does Shopping Preparation influence Consumer Buying Decisions?

Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences

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