The Effect of Payment Transparency on Consumption: Quasi-Experiments from the Field
- Dilip Soman
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Recent research suggests that the method of making a payment can influence the willingness to pay and consumption behavior. In this manuscript, we argue that payment mechanisms differ from each other along the dimensions of transparency, and that the degree of transparency correlates positively with the pain of paying using the mechanism, and negatively with consumption and spending. We replicate previous experimental results using quasi-experiments from the field, and find that the lower the payment transparency, the greater is the consumption. However, this effect is weak for products whose consumption rates are inflexible.
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- The Effect of Payment Transparency on Consumption: Quasi-Experiments from the Field
Volume 14, Issue 3 , pp 173-183
- Cover Date
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- Kluwer Academic Publishers
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- payment mechanisms
- Industry Sectors
- Dilip Soman (1)
- Author Affiliations
- 1. The Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, Canada