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The Bottom Dollar Effect: The Influence of Spending to Zero on Pain of Payment and Satisfaction

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  • Robin L. Soster
  • Andrew D. Gershoff
  • William O. Bearden

Abstract

Spending that exhausts a budget is shown to decrease satisfaction with purchased products relative to spending when resources remain in the budget. Six studies, including those in which participants earn and spend real resources and evaluate real products, explore this bottom dollar effect. This research contributes to prior mental accounting research regarding how costs influence decision making (e.g., bundling, coupling, sunk costs) and to the satisfaction literature. Supporting the role of pain of payment in this process, we show that the bottom dollar effect increases as effort required to earn budgetary resources increases, decreases in the presence of windfall gains, and decreases when there is less time between budget exhaustion and replenishment. Mediation analyses further demonstrate the role of payment pain in the bottom dollar effect. Implications are discussed in the context of behavioral research, marketing promotions management, and public policy.

Suggested Citation

  • Robin L. Soster & Andrew D. Gershoff & William O. Bearden, 2014. "The Bottom Dollar Effect: The Influence of Spending to Zero on Pain of Payment and Satisfaction," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 41(3), pages 656-677.
    • Handle: RePEc:oup:jconrs:doi:10.1086/677223
    DOI: 10.1086/677223
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    Cited by:

    1. Rik Pieters, 2017. "Meaningful Mediation Analysis: Plausible Causal Inference and Informative Communication," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 44(3), pages 692-716.
    2. Ma, Qingguo & He, Yijin & Tan, Yulin & Cheng, Lu & Wang, Manlin, 2024. "Unveiling the Impact of Payment Methods on Consumer Behavior: Insights and Future Directions," OSF Preprints 3fphk, Center for Open Science.
    3. Neill, Clinton & Zhang, Peilu, . "Payment Plans and Veterinary Services: Do They Reduce the Pain of Pet Owner Payment?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 49(1).
    4. Li, Yi & Pandelaere, Mario, 2021. "The denomination–spending matching effect," Journal of Business Research, Elsevier, vol. 128(C), pages 338-349.
    5. Sharma, Dheeraj & Pandey, Shivendra, 2020. "The role payment depreciation in short temporal separations: Should online retailer make customers wait?," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    6. Shi, Haijiao & Chen, Rong & Xu, Xiaobing, 2021. "How reward uncertainty influences subsequent donations: The role of mental accounting," Journal of Business Research, Elsevier, vol. 132(C), pages 383-391.
    7. Kastanakis, Minas N. & Magrizos, Solon & Kampouri, Katerina, 2022. "Pain (and pleasure) in marketing and consumption: An integrative literature review and directions for future research," Journal of Business Research, Elsevier, vol. 140(C), pages 189-201.
    8. 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.
    9. Min Chung Han, 2022. "Would you like to donate your reward points today? Mental accounting and checkout charity," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 19(3), pages 533-553, September.
    10. Akon E. Ekpo & Jenna Drenten & Pia A. Albinsson & Sophia Anong & Samuelson Appau & Lagnajita Chatterjee & Charlene A. Dadzie & Margaret Echelbarger & Adrienne Muldrow & Spencer M. Ross & Shelle Santan, 2022. "The platformed money ecosystem: Digital financial platforms, datafication, and reimagining financial well‐being," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(3), pages 1062-1078, September.
    11. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    12. Broekhoff, Marie-Claire & van der Cruijsen, Carin, 2024. "Paying in a blink of an eye: it hurts less, but you spend more," Journal of Economic Behavior & Organization, Elsevier, vol. 221(C), pages 110-133.
    13. Dalla Costa, Aldo Fortunato & Mollica, Vito & Singh, Abhay, 2021. "Payment methods and the disposition effect: Evidence from Indonesian mutual fund trading," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    14. Yudong Zhang & Huilong Zhang & Chubing Zhang & Dongjin Li, 2020. "The Impact of Self-Quantification on Consumers’ Participation in Green Consumption Activities and Behavioral Decision-Making," Sustainability, MDPI, vol. 12(10), pages 1-21, May.
    15. Lily (Xuehui) Gao & Evert Haan & Iguácel Melero-Polo & F. Javier Sese, 2023. "Winning your customers’ minds and hearts: Disentangling the effects of lock-in and affective customer experience on retention," Journal of the Academy of Marketing Science, Springer, vol. 51(2), pages 334-371, March.
    16. Araceli Galiano Coronil, 2022. "Behavior as an approach to identifying target groups from a social marketing perspective," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 19(2), pages 265-287, June.
    17. Manshad, Muhanad Shakir & Brannon, Daniel, 2021. "Haptic-payment: Exploring vibration feedback as a means of reducing overspending in mobile payment," Journal of Business Research, Elsevier, vol. 122(C), pages 88-96.

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