Marketing Letters

, Volume 14, Issue 3, pp 173–183 | Cite as

The Effect of Payment Transparency on Consumption: Quasi-Experiments from the Field

  • Dilip Soman

Abstract

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.

payment mechanisms transactions money spending consumption 

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Copyright information

© Kluwer Academic Publishers 2003

Authors and Affiliations

  • Dilip Soman
    • 1
  1. 1.The Rotman School of ManagementUniversity of TorontoTorontoCanada

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