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Money: A Bias for the Whole

Author

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  • Himanshu Mishra
  • Arul Mishra
  • Dhananjay Nayakankuppam

Abstract

We document the phenomenon of "bias for the whole," wherein greater value is perceived for money in the form of a whole (large denomination) than for equivalent amounts of money in parts (smaller denominations), resulting in a lower inclination to spend with the whole. We demonstrate across four experiments that the bias arises from greater processing fluency experienced in processing the whole as opposed to parts. This processing fluency is hedonically marked and generates positive affect that is attributed to the money, which results in an overvaluation of the whole, making one reluctant to spend with the whole. (c) 2006 by JOURNAL OF CONSUMER RESEARCH, Inc..

Suggested Citation

  • Himanshu Mishra & Arul Mishra & Dhananjay Nayakankuppam, 2006. "Money: A Bias for the Whole," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(4), pages 541-549, March.
    • Handle: RePEc:oup:jconrs:v:32:y:2006:i:4:p:541-549
    DOI: 10.1086/500484
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    Cited by:

    1. David Fielding & Stephen Knowles, 2015. "Can you spare some change for charity? Experimental evidence on verbal cues and loose change effects in a Dictator Game," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 718-730, December.
    2. Sotiris Vandoros, 2013. "My five pounds are not as good as yours, so I will spend them," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 546-559, December.
    3. Santana, Shelle & Thomas, Manoj & Morwitz, Vicki G., 2020. "The Role of Numbers in the Customer Journey," Journal of Retailing, Elsevier, vol. 96(1), pages 138-154.
    4. Li, Yi & Pandelaere, Mario, 2021. "The denomination–spending matching effect," Journal of Business Research, Elsevier, vol. 128(C), pages 338-349.
    5. Raghubir, Priya, 2006. "An information processing review of the subjective value of money and prices," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1053-1062, October.
    6. C. Lembregts & M. Pandelaere, 2012. "Are All Units Created Equal?: The Effect of Default Units on Product Evaluations," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/812, Ghent University, Faculty of Economics and Business Administration.
    7. Khan, Jashim & Belk, Russell W. & Craig-Lees, Margaret, 2015. "Measuring consumer perceptions of payment mode," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 34-49.
    8. Nyanamba, Steve Ondieki,, 2020. "Effect of Small Denominations of Kenyan Currency on the Economy," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(9), pages 206-210, September.
    9. Spiller, Stephen A. & Ariely, Dan, 2020. "How does the perceived value of a medium of exchange depend on its set of possible uses?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 161(C), pages 188-200.
    10. Falk, Tomas & Kunz, Werner H. & Schepers, Jeroen J.L. & Mrozek, Alexander J., 2016. "How mobile payment influences the overall store price image," Journal of Business Research, Elsevier, vol. 69(7), pages 2417-2423.
    11. Runnemark, Emma & Hedman, Jonas & Xiao, Xiao, 2014. "Do Consumers Pay More Using Debit Cards than Cash? An Experiment," Working Papers 2014:21, Lund University, Department of Economics.
    12. Jessica B. Hoel & Prachi Jain & Bridget Galaty, 2022. "JUST VENMO ME: Does form of payment affect risk taking and intertemporal choice?," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 8(1), pages 16-33, December.
    13. Hung, Hui-Hsi & Cheng, Yin-Hui & Chuang, Shih-Chieh & Yu, Annie Pei-I & Lin, Yu-Ting, 2021. "Consistent price endings increase consumers perceptions of cheapness," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    14. Bruna Bruno & Marisa Faggini, 2022. "The cashless man: do preferences matter?," Journal of Evolutionary Economics, Springer, vol. 32(5), pages 1525-1544, November.
    15. Joowon Park & Sachin Banker, 2023. "Bitcoin-denominated prices can reduce preference for vice products," Marketing Letters, Springer, vol. 34(2), pages 309-319, June.
    16. Roy, Rajat & Das, Gopal, 2022. "The role of contextual factors in increasing Pay-What-You-Want payments: Evidence from field experiments," Journal of Business Research, Elsevier, vol. 139(C), pages 1540-1552.
    17. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    18. Priya Raghubir & Mario Capizzani & Joydeep Srivastava, 2017. "What’s in Your Wallet? Psychophysical Biases in the Estimation of Money," Journal of the Association for Consumer Research, University of Chicago Press, vol. 2(1), pages 105-122.
    19. Lin, Ying-Ching & Fang, Shiuan-Huei, 2013. "The face value of foreign currency on consumer price perception—The moderating effect of product substitution," Journal of Business Research, Elsevier, vol. 66(6), pages 745-751.
    20. Cheng, Yin-Hui & Chuang, Shih-Chieh & Pei-I Yu, Annie & Lai, Wan-Ting, 2019. "Change in your wallet, change your choice: The effect of the change-matching heuristic on choice," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 67-76.
    21. Wang, Lili & Kim, Sara & Zhou, Xinyue, 2023. "Money in a “Safe” place: Money anthropomorphism increases saving behavior," International Journal of Research in Marketing, Elsevier, vol. 40(1), pages 88-108.
    22. He (Michael) Jia & Echo Wen Wan & Wanyi Zheng, 2023. "Stars versus Bars: How the Aesthetics of Product Ratings “Shape” Product Preference," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 50(1), pages 142-166.
    23. Kun Zhou & Jun Ye & Xiao-xiao Liu, 2023. "Is cash perceived as more valuable than digital money? The mediating effect of psychological ownership and psychological distance," Marketing Letters, Springer, vol. 34(1), pages 55-68, March.

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