Pain Of Payment - Deepstash

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Pain Of Payment

  • painful state of mind or psychological burden consumers experience upon purchase
  • lowered by credit card and mobile payments
  • bottom dollar effect: purchases using budgets close to exhaustion result in a lower customer satisfaction
  • higher level of mental budgeting results in stronger pain of payment

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MORE IDEAS FROM THE SAME ARTICLE

  • a state of physical/emotional isolation involving feelings of loneliness due to being left out, ignored or ostracised by others
  • leads to anti-social behaviour

  • prospect theory: loss perception decreased in consumers in a low state of mental budgeting
  • psychological myopia: tendency to focus on immediately relevant information (e.g., transaction fees) while ignoring relevant background information stronger fo...

H1: Socially excluded people have a higher preference for high-risk investment products than socially included people.

  • incl. mental budgeting (separation of monetary income into economic categories), labelling of income and assets, hedonic framing (evaluation of gains and loss combinations)
  • violates the fungibility assumption of money

The study found that consumers experiencing social exclusion are more likely to make high risk investments. This effect is moderated by consumers' level of mental budgeting such that at high levels of mental budgeting the effect of social exclusio...

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