The effect of salience on mental accounting: How integration versus segregation of payment influences purchase decisions

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25 Scopus citations

Abstract

Although mental accounting principles are generally robust, the integration-of-losses principle often fails. This research argues that when information salience is high, people actively segregate. To demonstrate that effect, this research uses purchase decision making for which the total payment is a key decision factor and compares examples such as the following equivalent total payments: "$120.95 for a stroller plus $19.95 for shipping" (i.e., segregation) versus "$140.90 for a stroller including shipping" (i.e., integration). Two studies demonstrate that integration increases purchase intentions when the salience of the smaller payment is higher. Specifically, integration leads to higher purchase intentions than does segregation when (1) the surcharge is visually more salient, (2) the surcharge is easy to process, and (3) price perceptions are stimulus instead of recall driven. Therefore, this research extends mental accounting by identifying conditions in which the integration-of-losses principle is likely to prevail.

Original languageEnglish (US)
Pages (from-to)381-391
Number of pages11
JournalJournal of Behavioral Decision Making
Volume19
Issue number4
DOIs
StatePublished - Oct 2006
Externally publishedYes

Keywords

  • Integration
  • Mental accounting
  • Price perception
  • Segregation

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Sociology and Political Science
  • Strategy and Management

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