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| Author: | Gourville, J.T. |
| Title: | The effects of monetary magnitude and level of aggregation on the temporal framing of price |
| Journal: | Marketing Letters
2003 : JUL, VOL. 14:2, p. 125-135 |
| Index terms: | Marketing Pricing Time |
| Language: | eng |
| Abstract: | Existing research has shown that the "pennies-a-day" strategy (herein: p-a-d s.) of reframing a large aggregate expense as small daily expense helps to reduce the perceived cost of transaction (Nagle and Holden in 1995, Price in 1995, and Gourville in 1998 and 1999). This paper builds on this research and explores the robustness of the phenomenon across two dimensions, (1) the level of temporal aggregation and (2) the dollar magnitude of the transaction. First, it is shown that the effectiveness of a p-a-d s. is not limited to per-day framing (herein: p-d f.) . Rather, a more general phenomenon is found in which a "less aggregate" expense is preferred to a "more aggregate" expense, such that if a p-d f. is preferred to a per-year framing (herein: p-y f.), than a per-month framing also will be preferred to a p-y f. Second, it is shown that this effectiveness reverses with the magnitude of the underlying expense. |
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