Dataset Information

Price-Denomination Effect: Choosing to Pay With Denominations That Are the Same as the Product Prices.

ABSTRACT: 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.

SUBMITTER: Reutskaja E

PROVIDER: S-EPMC7509091 | biostudies-literature | 2020

REPOSITORIES: biostudies-literature

ACCESS DATA

Publications

Price-Denomination Effect: Choosing to Pay With Denominations That Are the Same as the Product Prices.

Reutskaja Elena E Iyamabo Jeremiah J Raghubir Priya P Gallo Iñigo I

Frontiers in psychology 20200909

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 (<i>N</i> = 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 ...[more]

PMID: 33013597

Similar Datasets

Project description:BackgroundTen U.S. states, Canada, and Uruguay have passed laws to legalize the production and sale of cannabis for non-medical purposes. Available research has documented rapidly falling prices and changing product mixes, but many details are not well understood: particularly, the popularity, prices, and product characteristics of different cannabis edibles and extract-based products - each offering different ways to consume cannabis, with unclear health consequences.MethodsThis paper analyzes data from Washington's recreational cannabis market, which has recorded over 110 million retail item-transactions from July 2014 to October 2017. Previous research on price and product trends has focused mostly on herbal cannabis, which accounts for the majority, but a decreasing share, of sales. This paper applies advanced text-analytic methods to provide new insights, including (A) estimating potency data for edibles and (B) identifying extract sub-types. Patterns and trends are described, across product types, regarding THC and CBD profiles and price per THC.ResultsExtracts accounted for 28.5% of sales in October 2017. Of extracts categorized to subtype, nearly half were identified as "dabs", and another half "cartridges". In October 2017, price per 10 mg THC was roughly $3 among edibles, 70 cents among extract cartridges, and 30-40 cents for other flower and other extracts; solid concentrates offered the lowest priced THC among extract products. Price declines continue but have slowed. High-CBD chemovars are becoming more common, but still are almost non-existent in flower marijuana and rare (1% of sales) among extract products.ConclusionAs Washington's recreational cannabis market has developed over three and a half years, trends identified in that market may serve as an early indication of potential issues in other states. Legislators and regulators in other jurisdictions with commercial non-medical cannabis markets may wish to establish policies responsive to these trends in product popularity, price, and potency.

Project description:BackgroundMalaysia's stable health care system is facing challenges with increasing medicine costs. To investigate these issues a survey was carried out to evaluate medicine prices, availability, affordability, and the structure of price components.Methods and findingsThe methodology developed by the World Health Organization (WHO) and Health Action International (HAI) was used. Price and availability data for 48 medicines was collected from 20 public sector facilities, 32 private sector retail pharmacies and 20 dispensing doctors in four geographical regions of West Malaysia. Medicine prices were compared with international reference prices (IRPs) to obtain a median price ratio. The daily wage of the lowest paid unskilled government worker was used to gauge the affordability of medicines. Price component data were collected throughout the supply chain, and markups, taxes, and other distribution costs were identified. In private pharmacies, innovator brand (IB) prices were 16 times higher than the IRPs, while generics were 6.6 times higher. In dispensing doctor clinics, the figures were 15 times higher for innovator brands and 7.5 for generics. Dispensing doctors applied high markups of 50%-76% for IBs, and up to 316% for generics. Retail pharmacy markups were also high-25%-38% and 100%-140% for IBs and generics, respectively. In the public sector, where medicines are free, availability was low even for medicines on the National Essential Drugs List. For a month's treatment for peptic ulcer disease and hypertension people have to pay about a week's wages in the private sector.ConclusionsThe free market by definition does not control medicine prices, necessitating price monitoring and control mechanisms. Markups for generic products are greater than for IBs. Reducing the base price without controlling markups may increase profits for retailers and dispensing doctors without reducing the price paid by end users. To increase access and affordability, promotion of generic medicines and improved availability of medicines in the public sector are required.

Dataset Information

Price-Denomination Effect: Choosing to Pay With Denominations That Are the Same as the Product Prices.

Publications

Price-Denomination Effect: Choosing to Pay With Denominations That Are the Same as the Product Prices.

Similar Datasets

OmicsDI is part of the ELIXIR infrastructure

Tweets