Mental accounting and subsequent purchases: Consumer responses to price surprises

This research investigates how aspects of initial purchasing decisions affect subsequent purchasing decisions. Most past research has focused on single purchases—typically the selection of a single alternative from some choice set. In contrast, this dissertation focuses on how consumers' responses to savings and losses on an initial purchase impact spending decisions for a subsequent purchase. It specifically examines how these responses are moderated by: (1) consumer control, (2) product relatedness, and (3) savings magnitude. Four experimental studies address these issues.; Study 1 examined whether consumers respond asymmetrically to savings and losses when spending on a subsequent purchase. Subjects responded asymmetrically, but not significantly in one direction or the other. Qualitative data revealed the directionality of consumers' responses was largely a function whether the buyer was quality-driven, savings-driven, or “product interest”-driven.; Study 2 examined how consumer control affects subsequent purchasing decisions for savings and losses. Subjects were more responsive to savings from sources outside their control, but more sensitive to losses inside their control. Qualitative data for savings suggest buyers have already allocated an amount to spend before they shop to a mental “spend account,” facilitating transfer of unanticipated savings to subsequent purchases. For losses inside their control, buyers are likely to pay a price in terms of quality or consumption to atone for their mistake. When losses are outside their control, buyers are less likely to feel a responsibility toward reducing subsequent spending.; Study 3 examined savings under different degrees of product relatedness. Subjects spent more of a savings on a subsequent purchase when that purchase was related to the initial purchase. Qualitative data suggest savings for related products tend to be viewed in the same mental budget, facilitating transfer of savings on one purchase to subsequent spending on the other.; Study 4 examined different levels of savings magnitude on subsequent purchasing decisions. Subjects spent proportionally more of a savings on a subsequent purchase when the savings was of small rather than large magnitude. Qualitative data suggest small savings are more available to “spend now,” while portions of large savings are stored as “assets” for future use.