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When indulgence gets the best of you: Unexpected consequences of prepayment

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  • Besharat, Ali
  • Nardini, Gia

Abstract

Consumers often pay for consumption events up front. For example, consumers may pay an entrance fee for a food festival or a VIP pass to skip the line at a nightclub. However, research has yet to investigate how this prepayment affects consumers' subsequent consumption decisions. This paper investigates the effect of prepayment on escalation of commitment and the unexpected effects on subsequent consumption decisions. Specifically, we investigate consumers' inclination to indulge and spend once they have made a prepayment in the form of money or time. Our findings from a field study and two experiments suggest that under certain conditions, prepayment results in increased spending and indulgent consumption.

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  • Besharat, Ali & Nardini, Gia, 2018. "When indulgence gets the best of you: Unexpected consequences of prepayment," Journal of Business Research, Elsevier, vol. 92(C), pages 321-328.
    • Handle: RePEc:eee:jbrese:v:92:y:2018:i:c:p:321-328
    DOI: 10.1016/j.jbusres.2018.07.051
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    Cited by:

    1. Shinhye Kim & Alberto Sa Vinhas & U.N. Umesh, 2022. "Prepayment and future cross-buying: an exploratory analysis," Marketing Letters, Springer, vol. 33(3), pages 415-439, September.
    2. Jianjia He & Shengmin Liu & Tingting Li & Thi Hoai Thuong Mai, 2021. "The Positive Effects of Unneeded Consumption Behaviour on Consumers during the COVID-19 Pandemic," IJERPH, MDPI, vol. 18(12), pages 1-17, June.
    3. Cowan, Kirsten, 2020. "Anything you can imagine is possible: How imagining can overcome visceral drive states elicited in promotional advertising," Journal of Business Research, Elsevier, vol. 120(C), pages 529-538.
    4. Ram, Pappu Kalyan & Pandey, Neeraj & Persis, Jinil, 2024. "Modeling social coupon redemption decisions of consumers in food industry: A machine learning perspective," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    5. Besharat, Ali & Nardini, Gia & Roggeveen, Anne L., 2021. "Online daily coupons: Understanding how prepayment impacts spending at redemption," Journal of Business Research, Elsevier, vol. 127(C), pages 364-372.
    6. Wright, Scott A. & Schultz, Ainslie E., 2022. "Too gritty to indulge: Grit and indulgent food choices," Journal of Business Research, Elsevier, vol. 139(C), pages 173-183.

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