On the Perceived Value of Money: The Reference Dependence of Currency Numerosity Effects

Money illusion research shows that the nominal (face) value of money affects consumer perceptions of its real value. Recent mixed findings on consumer valuations in different currencies suggest that the underlying anchoring and adjustment processes are complex. We develop a framework to identify bou...

Full description

Saved in:
Bibliographic Details
Published in:The Journal of consumer research 2007-06, Vol.34 (1), p.1-10
Main Authors: Wertenbroch, Klaus, Soman, Dilip, Chattopadhyay, Amitava
Format: Article
Language:English
Subjects:
Brands
Budget constraints
Consumer behavior
Consumer prices
Consumer psychology
Consumer research
Consumer spending
Currency
Financial budgets
Money
Money illusion
Nominal prices
Perceptions
Studies
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Money illusion research shows that the nominal (face) value of money affects consumer perceptions of its real value. Recent mixed findings on consumer valuations in different currencies suggest that the underlying anchoring and adjustment processes are complex. We develop a framework to identify boundary conditions that specify the direction of anchoring effects on valuations in different currencies. Consumers anchor on the numerosity of the nominal difference between prices and salient referents (e.g., budgets) when evaluating transactions. Support for our framework comes from a series of experiments that evoke different reference standards. We discuss implications and opportunities for future research.
ISSN:0093-5301
1537-5277
DOI:10.1086/513041