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The effect of salience on mental accounting: how integration versus segregation of payment influences purchase decisions
Author(s) -
Kim Hyeong Min
Publication year - 2006
Publication title -
journal of behavioral decision making
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.136
H-Index - 76
eISSN - 1099-0771
pISSN - 0894-3257
DOI - 10.1002/bdm.534
Subject(s) - salience (neuroscience) , payment , mental accounting , salient , recall , perception , psychology , business , actuarial science , cognitive psychology , computer science , finance , neuroscience , artificial intelligence
Although mental accounting principles are generally robust, the integration‐of‐losses principle often fails. This research argues that when information salience is high, people actively segregate. To demonstrate that effect, this research uses purchase decision making for which the total payment is a key decision factor and compares examples such as the following equivalent total payments: “$120.95 for a stroller plus $19.95 for shipping” (i.e., segregation) versus “$140.90 for a stroller including shipping” (i.e., integration). Two studies demonstrate that integration increases purchase intentions when the salience of the smaller payment is higher. Specifically, integration leads to higher purchase intentions than does segregation when (1) the surcharge is visually more salient, (2) the surcharge is easy to process, and (3) price perceptions are stimulus instead of recall driven. Therefore, this research extends mental accounting by identifying conditions in which the integration‐of‐losses principle is likely to prevail. Copyright © 2006 John Wiley & Sons, Ltd.