On the Perceived Value of Money: The Reference Dependence of Currency Numerosity Effects
Klaus Wertenbroch, Dilip Soman, Amitava Chattopadhyay
Journal of Consumer Research · 2007 · Volume 34 · Issue 1
Abstract
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.
Keywords
Behavioral Decision Theory, Economic Psychology, Judgment and Decision Making, Pricing, Experimental Design and Analysis (ANOVA)
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