Manoj Thomas

Penny Wise and Pound Foolish: The Left‐Digit Effect in Price Cognition

Through five experiments, we provide a cognitive account of when and why nine-ending prices are perceived to be smaller than a price one cent higher. First, this occurs only when the leftmost digits of the prices differ (e.g.,

How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices

2.99 vs.

When Internal Reference Prices and Price Expectations Diverge: The Role of Confidence

3.00). Second, the left-digit effect also depends on the numerical and psychological distances between the target price and a competing products price. The closer the two prices being compared, the more likely is the left-digit effect. Third, the left-digit effect is not restricted to the domain of prices; it also manifests with other multidigit numbers. (c) 2005 by JOURNAL OF CONSUMER RESEARCH, Inc..

The Ease of Computation Effect: The Interplay of Metacognitive Experiences and Naive Theories in Judgments of Price Differences

Some food items that are commonly considered unhealthy also tend to elicit impulsive responses. The pain of paying in cash can curb impulsive urges to purchase such unhealthy food products. Credit card payments, in contrast, are relatively painless and weaken impulse control. Consequently, consumers are more likely to buy unhealthy food products when they pay by credit card than when they pay in cash. Results from four studies support these hypotheses. Analysis of actual shopping behavior of 1,000 households over a period of 6 months revealed that shopping baskets have a larger proportion of food items rated as impulsive and unhealthy when shoppers use credit or debit cards to pay for the purchases (study 1). Follow-up experiments (studies 2–4) show that the vice-regulation effect of cash payments is mediated by pain of payment and moderated by chronic sensitivity to pain of payment. Implications for consumer welfare and theories of impulsive consumption are discussed.

Psychological Distance and Subjective Experience: How Distancing Reduces the Feeling of Difficulty

When do internal reference prices differ from articulated price expectations? The authors propose that the internal reference price depends not only on the magnitude of the expected price but also on the confidence associated with this expectation. Four experiments delineate the effects of price expectation and confidence on the internal reference price. In Experiments 1 and 2, the authors manipulate repetition and examine the effects of repetition-induced confidence on price judgments. In Experiments 3 and 4, they manipulate confidence directly to investigate its effects on judgments. The results from all four experiments suggest that consumers with less confidence have higher internal reference prices than more confident consumers, even when they do not differ in their articulated price expectations. The authors discuss the implications of these results for pricing theory.

When Does Feeling of Fluency Matter?: How Abstract and Concrete Thinking Influence Fluency Effects

Consumers’ judgments of the magnitude of numerical differences are influenced by the ease of mental computations. The results from a set of experiments show that ease of computation can affect judgments of the magnitude of price differences, discount magnitudes, and brand choices. Participants seem to believe that it is easier to judge the size of a larger difference than that of a smaller difference. In the absence of appropriate corrective steps, this naive belief can lead to systematic biases in judgments. For example, when presented with two pairs of numbers, participants incorrectly judged the magnitude of the difference to be smaller for pairs with difficult computations (e.g., 4.97 – 3.96, an arithmetic difference of 1.01) than for pairs with easy computations (e.g., 5.00 – 4.00, an arithmetic difference of 1.00). The effect does not manifest when judgments do not entail mental computations or when participants are made aware that the ease or difficulty is caused by computational complexity. Furthermore, this effect is mitigated when participants’ prior experience is manipulated in a learning phase of the experiment. The results have implications for buyers and sellers and for understanding the role of metacognitive experiences in numerical judgments.

Personal Relevance and Mental Simulation Amplify the Duration Framing Effect

Psychological distance can reduce the subjective experience of difficulty caused by task complexity and task anxiety. Four experiments were conducted to test several related hypotheses. Psychological distance was altered by activating a construal mind-set and by varying bodily distance from a given task. Activating an abstract mind-set reduced the feeling of difficulty. A direct manipulation of distance from the task produced the same effect: participants found the task to be less difficult when they distanced themselves from the task by leaning back in their seats. The experiments not only identify psychological distance as a hitherto unexplored but ubiquitous determinant of task difficulty but also identify bodily distance as an antecedent of psychological distance.

Do Consumers Perceive Precise Prices to be Lower than Round Prices? Evidence from Laboratory and Market Data

It has been widely documented that fluency (ease of information processing) increases positive evaluation. We proposed and demonstrated in three studies that this was not the case when people construed objects abstractly rather than concretely. Specifically, we found that priming people to think abstractly mitigated the effect of fluency on subsequent evaluative judgments (Studies 1 and 2). However, when feelings such as fluency were understood to be signals of value, fluency increased liking in people primed to think abstractly (Study 3). These results suggest that abstract thinking helps distinguish central decision inputs from less important incidental inputs, whereas concrete thinking does not make such a distinction. Thus, abstract thinking can augment or attenuate fluency effects, depending on whether fluency is considered important or incidental information, respectively.

Beyond Posted Prices: The Past, Present, and Future of Participative Pricing Mechanisms

Different framing of the same duration (one year, 12 months, 365 days) can influence consumers’ impressions of subjective duration, thereby affecting their judgments and decisions. The authors propose that, ironically, self-relevance amplifies this duration framing effect. Consumers for whom a particular self-improvement domain is personally relevant are less likely to adopt a one-year self-improvement plan as compared with a 12-month plan because they perceive it as longer and more difficult. This bias is more likely to manifest in consumers who report that the task is highly personally relevant to them, who are making predictions for themselves (vs. others), and who have high (vs. low) task involvement. Personal relevance amplifies this effect because it prompts process-focused simulation of the plan, consequently increasing susceptibility to spurious duration and difficulty cues embedded in frames.

When Remembering Disrupts Knowing: Blocking Implicit Price Memory

We examine two questions: Does precision or roundedness of prices bias magnitude judgments? If so, do these biased judgments affect buyer behavior? In a laboratory pre-test, we find that people incorrectly judge precise prices (e.g.,