Mental budgeting and consumer decisions

Article Abstract:

Consumers often set budgets for categories of expenses (e.g., entertainment) and track expenses against their budget. Because budgets cannot perfectly anticipate consumption opportunities, people may earmark too much or too little money for a particular category. This leads them to overconsume or underconsume goods in that category. The results of three studies suggest that consumers do indeed set budgets and that budgeting may lead to underconsumption. To show that consumers track expenses, the studies demonstrate that budgeting effects are larger for purchases that are highly typical of their category. Such purchases reduce the amount people spend in a category and block the purchase of other typical items. The studies control for satiation and income effects; thus, budgeting adds predictive power to standard economic consumer theory. (Reprinted by permission of the publisher.)

Research, Personal budgets

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When the same prime leads to different effects

Article Abstract:

Two experiments were conducted to determine the influence of primes on consumer behavior. A single prime can create different, sometimes opposite, effects on choices of consumers depending on prime associations.

United States, Consumer Behavior, Psychological aspects, Influence, Priming (Psychology), Consumer behaviour, Report

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