Advertisement

Mental Accounting and Framing: Framework of Decisions in Consumer Price Judgment

  • Kazuhisa TakemuraEmail author
Chapter

Abstract

In decision making in economic behavior, information about price and quality is compiled and evaluated. This chapter focuses on the psychology behind price judgment. How do people organize and understand information such as prices psychologically? The concept of mental accounting is relevant to answer this question. This chapter addresses phenomena related to mental accounting. The problem of mental accounting is also closely related to the concepts of psychological purse and mental ruler. Furthermore, the concepts of mental accounting, psychological purse, and mental ruler can be interpreted as a manifestation of a phenomenon called “framing” in decision making. In this chapter, the problems of mental accounting and framing are interpreted especially by using the mental ruler model.

Keywords

Mental accounting Framing Reference price Mental ruler Psychophysical law 

References

  1. Aoki, M. (2004). Kakaku to shōhisha shinri [Price and consumer psychology]. In T. Ueda & T. Moriguchi. (Eds.), Kakaku puromōshon senryaku [Pricing and promotion strategy] (pp. 37–58). Tokyo, JP: Yuhikaku Publishing.Google Scholar
  2. Dickson, P., & Sawyer, A. (1990). The price knowledge and search of supermarket shoppers. Journal of Marketing, 54(3), 42–53.CrossRefGoogle Scholar
  3. Fechner, G. T. (1860). Elemente der psychophysik. Leibzing, DE: Breitkopf & Härtel.Google Scholar
  4. Hsee, C. K. (1998). Less is better: When low-value options are valued more highly than high-value options. Journal of Behavioral Decision Making, 11(2), 107–121.CrossRefGoogle Scholar
  5. Huber, J., Payne, J. W., & Puto, C. (1982). Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis. Journal of Consumer Research, 9, 90–98.CrossRefGoogle Scholar
  6. Huber, J., & Puto, C. (1983). Market boundaries and product choice: Illustrating attraction and substitution effects. Journal of Consumer Research, 10(1), 31–44.CrossRefGoogle Scholar
  7. Indo, T. (Ed.). (1977). Shinri sokutei, gakusyū riron [Psychological measurement, learning theory]. Tokyo, JP: Morikita Publishing.Google Scholar
  8. Johnson, E. J., Hershey, J., Meszaros, J., & Kunreuther, H. (1993). Framing, probability distortions, and insurance decisions. Journal of Risk and Uncertainty, 7, 35–51.CrossRefGoogle Scholar
  9. Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1990). Experiment tests of the endowment effect and coase theorem. Journal of Political Economy, 98, 1325–1348.CrossRefGoogle Scholar
  10. Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). The endowment effect, loss aversion, and status quo bias. Journal of Economic Perspectives, 5, 193–206.CrossRefGoogle Scholar
  11. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263–292.CrossRefGoogle Scholar
  12. Kojima, S. (1959). Shōhisha shinri no kenkyū [Investigation of consumer psychology]. Tokyo, JP: Nihon seisansei honbu.Google Scholar
  13. Kojima, S. (1986). Kakaku no shinri: Shōhisya ha nani wo kōnyū kettei no monosashi ni surunoka [Price psychology: What measure do consumers use to make purchasing decisions?]. Tokyo, JP: Diamond Inc.Google Scholar
  14. Kojima, S. (1994). Psychological approach to consumer buying decisions: Analysis of the psychological purse and psychology of price. Japanese Psychological Research, 36, 10–19.CrossRefGoogle Scholar
  15. Mandel, N., & Johnson, E. J. (2002). When Web pages influence choice: Effects of visual primes on experts and novice. Journal of Consumer Research, 29(2), 235–245.CrossRefGoogle Scholar
  16. Mazumdar, T., & Papatla, P. (1995). Loyalty differences in the use of internal and external reference prices. Marketing Letters, 6(2), 111–122.CrossRefGoogle Scholar
  17. Moriguchi, T., & Tsurumi, H. (2004). Burando ikusei to puromōshon [Brand development and promotion]. In T. Ueda & T. Moriguchi (Eds.), Kakaku puromōshon senryaku [Pricing and promotion strategy] (pp. 109–134). Tokyo, JP: Yuhikaku Publishing.Google Scholar
  18. Okuda, H. (2003). Ishikettei ni okeru bunmyaku kōka: Miryoku kōka, maboroshi kōka, oyobi tasū kōka [Context effects in decision making: Attraction, phantom, and plurality effects]. Shakai shinrigaku kenkyū [Japanese Journal of Social Psychology], 18(3), 147–155.Google Scholar
  19. Okuse, Y. (2014). Shōhisha ga koubai ishikettei ji ni shiyō suru sanshō kakaku ni kansuru jisshōteki kōsatsu [An empirical study on the use of reference prices for consumer decision making process]. Senshu daigaku shogaku kenkyu shohou [Bulletin of the Research Institute of Commerce], 45(5), 1–23.Google Scholar
  20. Pratkanis, A. R., & Farquhar, P. H. (1992). A brief history of research on phantom alternatives: Evidence for seven empirical generalizations about phantoms. Basic and Applied Social Psychology, 13(1), 103–122.CrossRefGoogle Scholar
  21. Shirai, M. (2005). Shōhisha no kakaku handan no mekanizumu: Naiteki sanshō kakaku no yakuwari [Mechanism of consumers’ price judgment: Role of internal reference price]. Tokyo, JP: Chikura Shobo.Google Scholar
  22. Stevens, S. S. (1975). Psychophysics: Introduction to its perceptual, neural and social prospects. New York, NY: Wiley.Google Scholar
  23. Takemura, K. (1996). Ishikettei to sono shien [Decision-making and support for decision-making]. In S. Ichikawa (Ed.), Ninchi shinrigaku 4kan shiko [Cognitive psychology thoughts] (Vol. 4, pp. 81–105). Tokyo, JP: University of Tokyo Press.Google Scholar
  24. Takemura, K. (1998). Jōkyō izonteki isikettei no teiseiteki moderu: Shinteki monosashi riron niyoru setsumei [Qualitative model of contingent decision-making: An explanation of using the mental ruler theory]. Ninchi Kagaku [Cognitive Studies], 5(4), 17–34.Google Scholar
  25. Takemura, K. (2001). Contingent decision making in the social world. In C. M. Allwood & M. Selart (Eds.), Decision making: Social and creative dimensions (pp. 153–173). Dordrecht, NL: Kluwer Academic.Google Scholar
  26. Thaler, R. H. (1985). Mental accounting and consumer choice. Marketing Science, 4, 199–214.CrossRefGoogle Scholar
  27. Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Marketing, 12, 183–206.CrossRefGoogle Scholar
  28. Thaler, R. H., & Johnson, E. J. (1990). Gambling with the house money and trying to break even: The effects of prior outcomes on risky choice. Management Science, 36, 643–660.CrossRefGoogle Scholar
  29. Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211, 453–458.CrossRefGoogle Scholar
  30. Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5, 297–323.CrossRefGoogle Scholar
  31. Wada, Y., Oyama, T., & Imai, S. (Eds.). (1969). Kankaku chikaku shinrigaku handobukku [A handbook for sensory and perception psychology]. Tokyo, JP: Seishin Shobo.Google Scholar
  32. Wakayama, D. (2014). Saitei kakaku hoshō tempo ni okeru kokyaku no taten chirashi riyōgata nesage yōsē kōi [Price-matching guarantees for customers’ buying behavior using flyers of competing retailers]. Komazawa daigaku keiei gakubu kenkyu kiyou [Journal of Komazawa University], 43, 19–39.Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Department of PsychologyWaseda UniversityTokyoJapan

Personalised recommendations