Journal article
Cumulative impact neglect in processing sequential changes
Journal of consumer psychology, Vol.33(1), pp.133-142
01/2023
DOI: 10.1002/jcpy.1294
Abstract
We demonstrate that decision contexts that involve sequential numerical changes over time can lead to suboptimal consumer choices in both incentivized and hypothetical studies. This is because, for such changes, an earlier outcome has a cumulative effect on the final total, which consumers tend to ignore. We document the prevalence of consumers' tendency to neglect this cumulative impact when processing sequential rent increases and price discounts as consumers focus on the naive totals and trends formed by the consecutive price changes and choose economically inferior options. We propose a nudge that helps alert consumers about the cumulative effects and decrease their tendency to fall prey to this bias. We discuss the theoretical contributions as well as the implications for consumers, managers, and policymakers.
Details
- Title: Subtitle
- Cumulative impact neglect in processing sequential changes
- Creators
- Kunter Gunasti - Washington State UniversityHaipeng (Allan) Chen - University of Kentucky
- Resource Type
- Journal article
- Publication Details
- Journal of consumer psychology, Vol.33(1), pp.133-142
- Publisher
- Wiley
- DOI
- 10.1002/jcpy.1294
- ISSN
- 1057-7408
- eISSN
- 1532-7663
- Number of pages
- 10
- Language
- English
- Date published
- 01/2023
- Academic Unit
- Marketing
- Record Identifier
- 9984618643502771
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