The Effect of Implicit versus Explicit Comparisons on Temporal Pricing Claims
- John T. Gourville
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Existing research has investigated the "pennies-a-day" strategy of reframing an "aggregate" expense as a "per day" expense (Nagle & Holden, 1995; Price 1995; Gourville 1998). This paper extends this research by considering the incremental impact on compliance of explicitly comparing the cost of a transaction to a specific petty cash expense (e.g., a cup of coffee). We show that in the presence of a ‘per day’ framing of price (e.g., $1 per day), an explicit comparison provides little added value. However, we also show that in the presence of an ‘aggregate’ framing of price (e.g., $350), an explicit comparison to a petty cash expense is sufficient to generate a "pennies-a-day" perspective. We conclude that it is not the ‘per day’ framing, per se, which drives "pennies-a-day" effectiveness, but the petty cash comparisons that such a framing either implicitly or explicitly generates.
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- The Effect of Implicit versus Explicit Comparisons on Temporal Pricing Claims
Volume 10, Issue 2 , pp 113-124
- Cover Date
- Print ISSN
- Online ISSN
- Kluwer Academic Publishers
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- Pennies-a-day strategy
- temporal framing
- consumer choice
- Industry Sectors
- Author Affiliations
- 1. Graduate School of Business Administration, Harvard University, Soldiers Field, Boston, MA, 02163