Labeled the “denomination effect,” study 1 shows in three field studies that the likelihood of spending is lower when an equivalent sum of money is represented by a single large denomination (e.g., one $20 bill) relative to many smaller denominations (e.g., 20 $1 bills). In two of the three field studies, individuals spent more once the decision to spend had been made. Study 2 then shows that consumers deliberately choose to receive money in a large denomination relative to small denominations when there is a need to exert self-control in spending. Study 3 further shows that the denomination effect is contingent on individual differences in people’s desire to reduce the pain of paying associated with spending. The results suggest that the denomination effect occurs because large denominations are psychologically less fungible than smaller ones, allowing them to be used as a strategic device to control and regulate spending.

The ease-of-retrieval hypothesis suggests that people use the ease with which information comes to mind as a heuristic in forming judgments (Schwarz et al. 1991). We examine the automaticity of the use of ease-of-retrieval as an input in judgments. We demonstrate that the ease-of-retrieval is used unintentionally, outside of awareness, and effortlessly, along with other consciously applied inputs, to make related judgments. Once experienced, its impact follows through to judgments, even when it is discredited as a source of information. Results across four studies suggest that an automatic source of information (viz., the ease-of-retrieval) may merely have to be accessible to be used in a judgment. We propose a mere-accessibility framework as a variant of Feldman and Lynch's (1988) accessibility-diagnosticity framework to explain these results.

This article examines systematic differences in people's spending behavior when using foreign currencies. Rather than overspend or underspend in general, we show that individuals' valuation of a product in an unfamiliar foreign currency is biased toward its nominal value—its face value—with inadequate adjustment for the exchange rate. This leads to underspending when the face value of a foreign currency is a multiple of an equivalent unit of a home currency (e.g., 4 Malaysian ringgits = 1 U.S. dollar) and overspending when it is a fraction (e.g., .4 Bahraini dinar = 1 U.S. dollar). Four studies demonstrate the robustness of the face value effect across different currencies, exchange rate frames, and with samples from two countries, and two studies show that ability-related factors such as time pressure and experience moderate the face value effect. The article concludes by discussing the theoretical implications of the findings.

The HIV virus is now an international killer, but individuals perceive that they are less likely to contract the virus than are others (the self-positivity bias). Three studies investigate the antecedents and consequences of the self-positivity bias in judgments of the risk of contracting AIDS. We show that the perceived similarity of another person to oneself and the ease with which related information can be retrieved from memory (the accessibility of information) moderate self-perceptions of risk in an absolute sense and reduce the self-positivity bias. We then demonstrate that increasing the accessibility of a cause of AIDS, in an advertisement propounding safe sex, increases perceptions of one's own risk of contracting AIDS, reduces the self-positivity bias, leads to more favorable attitudes and intentions toward practicing precautionary behaviors (e.g., using condoms, taking an HIV test), and also leads to deeper processing of AIDS educational material. Theoretical implications regarding the use of the accessibility of information as a cue and the self-positivity bias are discussed, and recommendations for social marketing communications are offered.

Consumers make distance judgments when they decide which store to visit or which route to take. However, these judgments may be prone to various spatial perception biases. While there is a rich literature on spatial perceptions in urban planning and environmental and cognitive psychology, there is little in the field of consumer behavior. In this article we introduce the topic of spatial perceptions as an area of research in marketing. We extend the literature on spatial perceptions by proposing that consumers use the direct distance between the endpoints of a path, or the distance “as the crow flies,” as a source of information while making distance judgments—the shorter the direct distance, the shorter the distance estimate. We study two spatial features that affect direct distance—path angularity (i.e., the size of the angle between path segments) and path direction (i.e., whether the path retraces back or not). We further propose and demonstrate that the direct-distance bias is due to the perceptual salience of direct distance and is used by consumers in an automatic manner. Theoretical implications for the manner in which consumers process spatial information and the use of cognitive heuristics while making spatial judgments are discussed.

This article examines how consumers process graphical financial information to estimate risk. We propose that consumers sample the local maxima and minima of a graph to infer the variation around a trend line, which is used to estimate risk. The local maxima and minima are more extreme the higher the run length of the stocks (the consecutive number of upward or downward movements of a price series with identical mean, variance, skewness, and kurtosis). Three experiments show that this leads to stocks with higher run lengths being perceived as riskier: the run-length effect. Importantly, the run-length effect is greater for investors who are more educated, are employed full time, trade more frequently, have had longer experience trading, and trade a wider range of financial instruments. Implications for the communication of financial products, public policy, and consumer welfare are discussed, as are theoretical implications for the processing of visual and financial information and behavioral finance.

We propose that consumers use the presence of a restriction (i.e., purchase limit, purchase precondition, or time limit) as a source of information to evaluate a deal. In a series of four studies we present evidence suggesting that restrictions serve to accentuate deal value and act as “promoters” of promotions. We begin by using aggregate level scanner data to test our hypothesis that a sales restriction (e.g., “limit X per customer”) results in higher sales. Via three subsequent experiments, we then investigate contextual and individual factors moderating this effect. Study 2 suggests that restrictions only have a positive effect for low need for cognition individuals. Study 3 explores the potential mediating role of deal evaluations on purchase intent across discount levels. Study 4 examines the effect of three types of restrictions (purchase limits, time limits, and purchase preconditions) across discount levels and explores the underlying beliefs driving these effects. An integrative model across studies demonstrates the robustness of the restriction effect and supports the premise that restrictions work through signaling value. Implications for how consumers determine promotional value are discussed.

Marketing research surveys often elicit behavioral frequency reports. When estimating the number of times a respondent engages in a behavior, s/he may use information about the behavior stored in memory, information provided by the response context, or both. Based on an accessibility-diagnosticity framework, we theorize that the probability of using context-based information in forming a frequency judgment is inversely proportional to the diagnosticity of the alternate inputs accessible in memory. That is, when memory-based information is accessible and diagnostic, contextual information is not used; when memory-based information is accessible but not diagnostic, the use of contextual information depends on its perceived diagnosticity. Finally, when memory-based information is not accessible, contextual information is used even when its diagnosticity is questionable. The results of three experiments support this model. Theoretical implications and recommendations for questionnaire design are discussed.