the demand for lotto the role of conscious selection this article presents estimates of the elasticity of demand for lottery tickets using time series data in which there is variation in the expected value of a lottery ticket induced by rollovers an important feature of our data is that there are far more rollovers than expected given the lottery design we find strong evidence that individuals do not choose their lottery numbers uniformly from a uniform distribution that is conscious selection we use our estimates to derive the inverse supply function for the industry and this enables us to identify the demand elasticity we find the price elasticity to be close to unity which implies that the operator is revenue maximizing which is the regulator s objective

the causes of preference reversal observed preference reversal cannot be adequately explained by violations of independence the reduction axiom or transitivity the primary cause of preference reversal is the failure of procedure invariance especially the overpricing of low probability high payoff bets this result violates regret theory and generalized nonindependent utility models preference reversal and a new reversal involving time preferences are explained by scale compatibility which implies that payoffs are weighted more heavily in pricing than in choice copyright 1990 by american economic association

nostalgia weakens the desire for money nostalgia has a strong presence in the marketing of goods and services the current research asked whether its effectiveness is driven by its weakening of the desire for money six experiments demonstrated that feeling nostalgic decreased people s desire for money using multiple operationalizations of desire for money nostalgia vs neutral condition participants were willing to pay more for products experiment 1 parted with more money but not more time experiment 2 valued money less experiments 3 and 4 were willing to put less effort into obtaining money experiment 5 and drew smaller coins experiment 6 process evidence indicated that nostalgia s weakening of the desire for money was due to its capacity to foster social connectedness experiments 5 and 6 implications for price sensitivity willingness to pay consumer spending and donation behavior are discussed nostalgia may be so commonly used in marketing because it encourages consumers to part with their money

licensing effect in consumer choice abstract most choices in the real world follow other choices or judgments the authors show that a prior choice which activates and boosts a positive self concept subsequently licenses the choice of a more self indulgent option the authors propose that licensing can operate by committing to a virtuous act in a preceding choice which reduces negative self attributions associated with the purchase of relative luxuries five studies demonstrate the proposed licensing effect of a prior commitment to a virtuous act on subsequent choice consistent with the authors theory the preference for an indulgent option diminishes if the licensing task is attributed to an external motivation the authors also report a mediation analysis in support of their theoretical explanation that the licensing effect operates by providing a temporary boost in the relevant self concept

longitude matters time zones and the location of foreign direct investment abstract using bilateral foreign direct investment fdi data we find that differences in time zones have a negative and significant effect on the location of fdi we show that this finding is robust across different specifications estimation methods and proxies for time zone differences time zones also have a negative effect on trade but this effect is smaller than that on fdi finally the impact of the time zone effect has increased over time suggesting that it is not likely to vanish with the introduction of new information technologies

linking loss aversion and present bias with overspending behavior of tourists insights from a lab in the field experiment abstract building upon prospect theory and hyperbolic time discounting models we explore how behavioral factors influence the probability of overspending among outbound leisure travelers we construct our data in two steps first we collect demographics and travel related variables from a random sample of 314 singaporean tourists across different age groups and income levels second we conduct a field experiment to measure their risk and time preferences specifically loss aversion and present bias we then explore the link between the measured preferences to overspending behavior the findings reveal an interesting link between loss aversion present bias and traveling expenditure patterns outbound tourists with high loss aversion and high present bias are more likely to overspend finally our study also highlights the role of group identity in de biasing specifically individuals are more likely to behave according to standard economic models when making decisions in groups

deferring versus expediting consumption the effect of outcome concreteness on sensitivity to time horizon abstract this work examines consumers preferences for consumption timing specifically the authors examine how temporal framing deferring versus expediting of a decision moderates the sensitivity of consumers pattern of discounting to changes in time horizon the results from three experiments show greater decline in consumers discount rates with time horizon i e greater present bias when they defer than when they expedite consumption these results are robust to using monetary and nonmonetary outcomes as well as to different time horizons months days the authors further demonstrate that the different levels of mental representations concreteness triggered by the two decision frames moderate this difference in sensitivity

the boundaries of loss aversion abstract in this article the authors propose some psychological principles to describe the boundaries of loss aversion a key idea is that exchange goods that are given up as intended do not exhibit loss aversion for example the authors propose that money given up in purchases is not generally subject to loss aversion the results of several experiments provide preliminary support for the hypotheses the authors find that consistent with prospect theory loss aversion provides a complete account of risk aversion for risks with equal probability to win or lose the authors propose boundaries for this result and suggest further tests of the model

endogenous market structures in international trade natura facit saltum abstract almost all of the large literature on international trade with imperfect competition assumes exogenous market structures the purpose of this paper is to develop a simple model that generates alternative market structures as nash equilibria for different parameterizations of the basic model equilibrium market structure is a function of the underlying technology familiar configurations such as a duopoly competing in exports or a single multinational producing in both markets arise as special cases small tax policy changes can produce large welfare effects as the equilibrium market structure shifts implying discontinuous jumps in prices quantities and profits

the relative regressivity of seven lottery games we study the implicit tax incidence of raising state revenue through a monopoly state run lottery using a new dataset on individual minnesota lottery game sales by zip code we use the bootstrap to compute ses and construct confidence intervals for suits indices of seven lottery products we conclude that the implicit tax on each product is regressive and find statistically significant differences in regressivity between some products minnesota s newly introduced g3 instant scratch product printed at time and place of purchase is also the most regressive lottery game

spending time versus spending money we find systematic differences in the way that people spend time versus money ex post people are able to more easily accommodate negative outcomes by adjusting the value of their temporal inputs ex ante people are willing to spend more time for higher risk higher return options whereas when spending money the pattern is reversed and the more standard pattern of increasing risk aversion is observed although accurate assessment of the opportunity costs of time is key to making good decisions ambiguity in the value of time promotes accommodation and rationalization

productivity metrics and consumers misunderstanding of time savings abstractthe marketplace is replete with productivity metrics that put units of output in the numerator and one unit of time in the denominator e g megabits per second mbps to measure download speed in this article three studies examine how productivity metrics influence consumer decision making many consumers have incorrect intuitions about the impact of productivity increases on time savings they do not sufficiently realize that productivity increases at the high end of the productivity range e g from 40 to 50 mbps imply smaller time savings than productivity increases at the low end of the productivity range e g from 10 to 20 mbps consequently the availability of productivity metrics increases willingness to pay for products and services that offer higher productivity levels this tendency is smaller when consumers receive additional information about time savings through product experience or through metrics that are linearly related to time savings consumers intuitions about time

price framing effects on the purchase of hedonic and utilitarian bundles abstract marketers are increasingly offering bundles that combine cross category seemingly unrelated items this article examines the conditions under which framing a discount as savings on certain items of cross category bundles is more effective for increasing bundle purchase three experiments show that the purchase of a cross category bundle is more likely when the discount is framed as savings on the relatively hedonic component rather than as savings on the utilitarian component or on the total bundle the authors explain the findings based on the notion that a discount provides a justification that increases the likelihood of hedonic purchases but has little impact on utilitarian consumption the article concludes with a discussion of managerial implications of the findings

gravity and culture in foreign portfolio investment abstract using panel regression estimates from the imf s cpis survey of foreign debt and equity portfolios across 174 originating and 50 destination countries from 2001 to 2007 we clarify the role of culture and extend the set of cultural variables that have been investigated in gravity models of foreign portfolio investment fpi incorporating hofstede s cultural dimensions of individualism masculinity power distance and uncertainty avoidance we show how cultural traits in both originating and destination countries as well as the cultural distances that separate them interact with geographic distance and other gravity variables to determine global fpi patterns we find hitherto unreported effects and show that while gravity always deters fpi aspects of culture and cultural distance can offset this by supporting fpi

political instability pro business market reforms and their impacts on national systems of innovation abstract we investigate the impacts of political instability and pro business market reforms on national systems of innovation nsi across a range of developing and developed countries evidence suggests that national systems of innovation are most likely to flourish in developed politically stable countries and less likely to prosper in historically unstable countries while research has shown that pro business market reforms can be a valuable policy instrument to boost economic development in less developed countries the extent to which these reforms affect a country s innovativeness has been neglected in the literature in particular the degree to which pro business market reforms may compensate for political instability when it comes to fostering national systems of innovation remains under researched our findings support established arguments concerning the strong influence of political instability on inputs to national innovation systems we find however mixed effects for pro business market reforms while results indicate a negative direct influence on nsi they consistently show a strong moderating effect that counterbalances the negative impact of political instability especially in those developing country environments where science and technology are lagging these results provide important implications for policymakers as well as for our understanding of emerging and transition economies and national technological capability

substitution between games in the uk national lottery virtually all lottery agencies offer a variety of games to suit the tastes of players in an attempt to maximize revenue to the government using the uk national lottery which offers a variety of on line and scratchcard games the extent to which there is substitution or complementarity between games is evaluated employing weekly data from the three uknl lottery games offered over the sample period it is found that own game characteristics have by far the largest influence on sales some evidence is found suggesting that the lotto and scratchcard games are partial substitutes for one another thunderball sales appear independent of the other two games some evidence is also found that the wednesday and saturday drawings of the lotto game are substitutes the overall conclusion is that camelot has successfully designed and marketed three games that each appeal to bettors in different ways thus sales from one game do not seem to seriously cannibalize the sales of the other games with the exceptions no

contracts intellectual property rights and multinational investment in developing countries abstract the policy debate between multinational firms favoring strong contract law and host country governments who often oppose such protection motivates the paper local agents managers learn the multinational s technology and can defect to start a rival firm contract enforcement including binding the multinational itself makes the multinational better off outcomes for the host country are more complex depending on mode switches induced by enforcement if enforcement induces the multinational to switch from exporting to local production welfare improves if local production was occurring anyway enforcement may result in the loss of rents to local agents and lower welfare

anomalies in intertemporal choice evidence and an interpretation research on decision making under uncertainly has been strongly influenced by the documentation of numerous expected utility eu anomalies behaviors that violate the expected utility axioms the relative lack of progress on the closely related topic of intertemporal choice is partly due to the absence of an analogous set of discounted utility du anomalies we enumerate a set of du anomalies analogous to the eu anomalies and propose a model that accounts for the anomalies as well as other intertemporal choice phenomena incompatible with du we discuss implications for savings behavior estimation of discount rates and choice framing effects

what goes around comes around effects of offshore outsourcing on the export performance of firms we examine the effect of offshore outsourcing on the export performance of firms building on the theories of international business the resource based view and transaction cost economics we argue that offshore outsourcing helps firms directly or indirectly to export more it may reduce their production costs and enhance their flexibility it may also provide them with new resources and market knowledge however the impact of offshore outsourcing depends on the resources and capabilities of firms to manage a network of foreign suppliers and to absorb foreign knowledge using a database of around 2000 manufacturing mnes in france in 1999 we find that offshore outsourcing increases export performance the effects being stronger in the export markets where firms import intermediate goods we also show that the firm size the organization of intra firm imports and the export experience moderate the effects of offshore outsourcing positively these findings have implications for firms and policymakers journal of international business studies 2011 42 334 344 doi 10 1057 jibs 2010 26

discount rates for time versus dates the sensitivity of discounting to time interval description abstract six experiments examine the impact of time interval descriptions on consumers discount rates consumers exhibit more discounting e g they demand more money to delay income when delay intervals are described by extents of time than when delay intervals are described by dates this pattern holds in various contexts including gains and losses and is robust to response mode changes findings further indicate that this effect may arise because compared with date descriptions extent descriptions enhance perceptions of interval length the author discusses other potential mechanisms and implications

consumption self control by rationing purchase quantities of virtue and vice consumers attempts to control their unwanted consumption impulses influence many everyday purchases with broad implications for marketers pricing policies addressing theoreticians and practitioners alike this paper uses multiple empirical methods to show that consumers voluntarily and strategically ration their purchase quantities of goods that are likely to be consumed on impulse and that therefore may pose self control problems for example many regular smokers buy their cigarettes by the pack although they could easily afford to buy 10 pack cartons these smokers knowingly forgo sizable per unit savings from quantity discounts which they could realize if they bought cartons by rationing their purchase quantities they also self impose additional transactions costs on marginal consumption which makes excessive smoking overly difficult and costly such strategic self imposition of constraints is intuitively appealing yet theoretically problematic the marketing literature lacks operationalizations and empirical tests of such consumption self control strategies and of their managerial implications this paper provides experimental evidence of the operation of consumer self control and empirically illustrates its direct implications for the pricing of consumer goods moreover the paper develops a conceptual framework for the design of empirical tests of such self imposed constraints on consumption in consumer goods markets within matched pairs of products we distinguish relative virtue and vice goods whose preference ordering changes with whet her consumers evaluate immediate or delayed consumption consequences for example ignoring long term health effects many smokers prefer regular relative vice to light relative virtue cigarettes because they prefer the taste of the former however ignoring these short term taste differences the same smokers prefer light to regular cigarettes when they consider the long term health effects of smoking these preference orders can lead to dynamically inconsistent consumption choices by consumers whose tradeoffs between the immediate and delayed consequences of consumption depend on the time lag between purchase and consumption this creates a potential self control problem because these consumers will be tempted to over consume the vices they have in stock at home purchase quantity rationing helps them solve the self control problem by limiting their stock and hence their consumption opportunities such rationing implies that per purchase occasion vice consumers will be less likely than virtue consumers to buy larger quantities in response to unit price reductions such as quantity discounts we first test this prediction in two laboratory experiments we then examine the external validity of the results at the retail level with a field survey of quantity discounts and with a scanner data analysis of chain wide store level demand across a variety of different pairs of matched vice regular and virtue reduced fat calorie or caffeine etc product categories the analyses of these experimental field and scanner data provide strong convergent evidence of a characteristic crossover in demand schedules for relative vices and virtues for categories as diverse as among others potato chips chocolate chip cookies cream cheese beer soft drinks ice cream and frozen yogurt chewing gum coffee and beef andturkey bologna vice consumers demand increases less in response to price reductions than virtue consumers demand although their preferences are not generally weaker for vices than for virtues constraints on vice purchases are self imposed and strategic rather than driven by simple preferences we suggest that rationing their vice inventories at the point of purchase allows consumers to limit subsequent consumption as a result of purchase quantity rationing however vice buyers forgo savings from price reductions through quantity discounts effectively paying price premiums for the opportunity to engage in self control thus purchase quantity rationing vice consumers are relatively price in sensitive from a managerial and public policy perspective our findings should offer marketing practitioners in many consumer goods industries new opportunities to increase profits through segmentation and price discrimination based on consumer self control they can charge premium prices for small sizes of vices relative to the corresponding quantity discounts for virtues virtue consumers on the other hand will buy larger amounts even when quantity discounts are relatively shallow a key conceptual contribution of this paper lies in showing how marketing researchers can investigate a whole class of strategic self constraining consumer behaviors empirically moreover this research is the first to extend previous theoretical work on impulse control by empirically demonstrating its broader implications for marketing decision making

magnitude time and risk differ similarly between joint and single evaluations arguably all choice options involve three basic attributes magnitude outcome size time of occurrence and probability of occurrence and are evaluated in one of two basic evaluation modes je joint evaluation involving comparison of multiple options and se single evaluation without comparison this research explores how reactions to the three basic attributes and their associated functions utility time discounting and probability weighting vary between the two basic evaluation modes nine studies tapping diverse contexts yield two general results first for all these attributes people are more sensitive to variations near endpoints zero magnitude no delay and 0 or 100 probability than in other regions and this differential sensitivity is more pronounced in se than in je second when faced with options involving a trade off between magnitude and time delay or between magnitude and probability risk people are both more delay averse and more risk averse in se than in je

probability of purchase amount of purchase and the demographic incidence of the lottery tax abstract when consumers indifference curves are discontinuous at zero perhaps due to stigma or fixed costs of purchase then factors influencing the amount purchased will have a different effect on the probability of purchase estimation of the demand for a commodity like lottery tickets requires a procedure that accounts for this tobit estimation commonly used in this literature does not allow for this generalization we investigate individual lottery ticket purchases using data from a survey of households our results are quite disparate from earlier studies regarding the effects of many demographic variables on probability of play level of play and expected lottery ticket purchases and imply a different demographic incidence of the lottery tax than previous studies suggest

how construals of money versus time impact consumer charitable giving while past research has suggested that consumers have fundamentally different responses to thinking about money versus time the current work clarifies an important nuance in terms of how consumers construe these two resources we demonstrate that in the domain of charitable giving money is construed relatively more concretely whereas time is construed relatively more abstractly this difference in the construal of these two resources has implications for how appeals for charitable contributions or money versus time should be framed when the construal level at which the consumer considers the cause is aligned misaligned with the construal level of the resource being requested contribution intentions and behaviors increase decrease in addition the moderating role of resource abundance is examined in particular when money is considered abundant vs nonabundant consumers no longer exhibit more concrete thoughts in response to money compared to time finally when the donation request makes consumers think of money in a more abundant manner monetary donations can be successfully motivated with a more abstract call for charitable support the theoretical and practical implications for marketers and charitable organizations are discussed

one money one market the effect of common currencies on trade currency unions their dramatic effect on international trade a gravity model is used to assess the separate effects of exchange rate volatility and currency unions on international trade the panel data bilateral observations for five years during 1970 90 covering 186 countries includes 300 observations in which both countries use the same currency i find a large positive effect of a currency union on international trade and a small negative effect of exchange rate volatility even after controlling for a host of features including the endogenous nature of the exchange rate regime these effects statistically significant imply that two countries sharing the same currency trade three times as much as they would with different currencies currency unions like the european emu may thus lead to a large increase in international trade with all that that entails andrew rose

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

the fewer the better number of goals and savings behavior abstract this article examines the effect of the number of goals on consumers savings behavior drawing from research on implementation intention the authors show that under certain conditions presenting a single savings goal leads to greater savings intention and actual savings than presenting multiple savings goals multiple goals typically evoke trade offs among competing goals and thus increase the likelihood that people will remain in a deliberative mind set and defer actions in contrast the authors propose and demonstrate that a single goal evokes a stronger implementation intention which in turn has a greater effect on behavior change they also show that the advantage of a single goal over multiple goals on saving is attenuated when saving is easier to implement or when the multiple savings goals are integrated rather than competing among themselves theoretical and practical implications are discussed

long range growth economic development in the global network of air links we study the impact of international long distance flights on the global spatial allocation of economic activity to identify causal effects we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles we show that these air links have a positive effect on local economic activity as captured by satellite measured night lights to shed light on how air links shape economic outcomes we first present evidence of positive externalities in the global network of air links connections induce further connections we then find that air links increase business links showing that the movement of people fosters the movement of capital in particular this is driven mostly by capital flowing from high income to middle income but not low income countries taken together our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses but also gives rise to increased spatial inequality locally and potentially globally

sunset time and the economic effects of social jetlag evidence from us time zone borders abstract the rapid evolution into a 24 h society challenges individuals ability to conciliate work schedules and biological needs epidemiological research suggests that social and biological time are increasingly drifting apart social jetlag this study uses a spatial regression discontinuity design to estimate the economic cost of the misalignment between social and biological rhythms arising at the border of a time zone in the presence of relatively rigid social schedules e g work and school schedules exploiting the discontinuity in the timing of natural light at a time zone boundary we find that an extra hour of natural light in the evening reduces sleep duration by an average of 19 minutes and increases the likelihood of reporting insufficient sleep using data drawn from the centers for disease control and prevention and the us census we find that the discontinuity in the timing of natural light has significant effects on health outcomes typically associated with circadian rhythms disruptions e g obesity diabetes cardiovascular diseases and breast cancer and economic performance per capita income we provide a lower bound estimate of the health care costs and productivity losses associated with these effects

frames of mind in intertemporal choice recent research has demonstrated that choices between gambles are systematically influenced by the way they are expressed kahneman and tversky s prospect theory kahneman d a tversky 1979 prospect theory an analysis of decision under risk econometrica472 363 391 explains many of these framing effects as shifts in the point of reference from which prospects are evaluated this paper demonstrates the applicability of the reference point concept to intertemporal choice three experiments demonstrate that when people choose between immediate and delayed consumption the reference point used to evaluate alternatives can significantly influence choice the first study elicited relative preference for immediate and delayed consumption using three methods each of which differently framed choices between alternatives offering identical end state consumption the conventional discounted utility model predicts that the three methods of elicitation should yield similar estimates of time preference but preferences were found to differ in accordance with a reference point model the second and third studies extend and replicate the results from the first the third using real rather than hypothetical choices

trade blocs currency blocs and the reorientation of world trade in the 1930s we analyze the impact of commercial and financial policies on the reorientation of trade in the 1930s we report evidence that commercial policies attenuated prior connections between income growth and trade and that exchange rate instability marginally discouraged international trade in contrast the tendency toward regionalization commonly ascribed to the formation of trade and currency blocs was already evident to a considerable extent prior to the regional policy initiatives of the 1930s this reorientation is more properly attributed to ongoing historical forces such as commercial and financial links between countries forged over many years

decision making over time and under uncertainty a common approach this paper considers a number of parallels between risky and intertemporal choice we begin by demonstrating a one to one correspondence between the behavioral violations of the respective normative theories for the two domains i e expected utility and discounted utility models we argue that such violations or preference reversals are broadly consistent with three propositions about the weight that an attribute receives in both types of multiattribute choice specifically it appears that 1 if we add a constant to all values of an attribute then that attribute becomes less important 2 if we proportionately increase all values of an attribute or if we change the sign of an attribute from positive to negative then that attribute becomes more important the generality of these propositions as well as the constraints they would impose on separable representations of multiattribute preferences is discussed

the time vs money effect shifting product attitudes and decisions through personal connection the results of five field and laboratory experiments reveal a time versus money effect whereby activating time vs money leads to a favorable shift in product attitudes and decisions because time increases focus on product experience activating time vs money augments one s personal connection with the product thereby boosting attitudes and decisions however because money increases the focus on product possession the reverse effect can occur in cases where merely owning the product reflects the self i e for prestige possessions or for highly materialistic consumers the time versus money effect proves robust across implicit and explicit methods of construct activation

mental budgeting and consumer decisions 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

a generalizable scale of propensity to plan the long and the short of planning for time and for money planning has pronounced effects on consumer behavior and intertemporal choice we develop a six item scale measuring individual differences in propensity to plan that can be adapted to different domains and used to compare planning across domains and time horizons adaptations tailored to planning time and money in the short run and long run each show strong evidence of reliability and validity we find that propensity to plan is moderately domain specific scale measures and actual planning measures show that for time people plan much more for the short run than the long run for money short and long run planning differ less time and money adaptations of our scale exhibit sharp differences in nomological correlates short run and long run adaptations differ less domain specific adaptations predict frequency of actual planning in their respective domains a very long run money adaptation predicts fico credit scores low planners thus face materially higher cost of credit

contraction with unpacking when unpacking leads to lower calorie budgets consumers set a lower consumption budget when they set individual calorie budgets for constituent categories e g breakfast lunch dinner and snacks categorical approach versus when they set a total budget overall approach this contraction effect of unpacking a judgment is driven by motivated reasoning consumers are motivated to reduce calorie consumption and this motive directs their cognitive elaboration for the budget decision to be on what to cut and how much to cut furthermore the categorical vs overall approach brings to mind more thoughts that are consistent with the motive to reduce consumption which then leads to a lower calorie budget consistent with this explanation the level of elaboration on reducing calorie intake especially on occasions where overconsumption is less salient mediates the contraction effect in addition the contraction effect is attenuated when the motive to reduce consumption is deactivated finally while the contraction effect occurs when consumers have a motive to reduce consumption the classic expansion effect of unpacking occurs when consumers are prompted to think about what to consume or are motivated to increase consumption the results for calorie budgeting are shown to have downstream consequences on actual food consumption

the welfare effects of lotto evidence from the uk abstract this paper estimates the demand for lottery tickets using pooled cross section data that contain individual incomes and extensive information about characteristics one of the cross sections corresponded to a draw which was a double rollover the jackpot was enhanced by adding the two previous draws jackpots which had not been won together these datasets provide sufficient observations facing different prices to allow us to estimate the price elasticity as well as the income elasticity of demand we estimate tobit and other specifications and use the estimates to evaluate the welfare effects arising from the introduction of the lottery

the hardships of long distance relationships time zone proximity and the location of mnc s knowledge intensive activities abstract using a unique global dataset on multinational corporations mncs with precise location of headquarters and affiliates i present evidence of a trade off between distance to the headquarters and knowledge intensity of the affiliates economic activity this trade off is strongly diminished the higher the overlap in working hours between the headquarters and the affiliate in order to rule out biases arising from confounding factors i implement a regression discontinuity framework to show that the economic activity of a subsidiary located just across the time zone line which increases the overlap in working hours with its headquarters is on average roughly 1 higher on the knowledge intensity scale the results are present only for foreign horizontal subsidiaries overall the findings suggest that barriers to real time communication within mncs play an important role in the location decisions of their subsidiaries

multinationals multi plant economies and the gains from trade a general equilibrium model of a multinational enterprise based on economies of multi plant operation is developed these economies are modelled as arising from the existence of a joint input whose productivity in each production facility is independent of the number of facilities maintained by a firm the multinational thus offers the world increased technical efficiency by eliminating the duplication of the joint input that would occur with independent national firms since this technical efficiency may come at the expense of increased market power the full determinants of home country host country and world welfare are considered

the behavioral life cycle hypothesis self control mental accounting and framing are incorporated in a behavioral enrichment of the life cycle theory of saving called the behavioral life cycle blc hypothesis the key assumption of the blc theory is that households treat components of their wealth as nonfungible even in the absence of credit rationing specifically wealth is assumed to be divided into three mental accounts current income current assets and future income the temptation to spend is assumed to be greatest for current income and least for future income considerable empirical support for the blc theory is presented primarily drawn from published econometric studies

who plays the numbers games in the middle of the day we analyse the increase in sales of pick 3 and pick 4 daily numbers lottery games and other ohio lottery games after ohio introduced midday drawings for the pick 3 and pick 4 games in august 1999 the midday drawings increased pick 3 sales by 5 pick 4 sales by 12 and total lottery sales by 2 based on our analysis of a 36 month panel dataset of ohio lottery sales by zip code midday drawings raise more revenue from the strongly regressive daily numbers games however the introduction of midday drawings does not change the negative income elasticities of demand for numbers games in an economically meaningful manner

losing sleep at the market the daylight saving anomaly reply motivated by the recent flurry of activity in sleep research this paper explores the connection between sleep disruptions following spring and fall clock shifts associated with daylight savings time and equity returns it is shown that the weekend effect in the form of the lower than expected friday to monday returns is particularly pronounced for the two weekends involving daylight savings clock changes this abstract was borrowed from another version of this item

same as it ever was europe s national borders and the market for corporate control abstract national borders continue to be strong barriers for mergers and acquisitions in europe using regional data we construct a gravity model and find that the restraining impact of national borders decreased by more than 17 percent between 1991 and 2007 however no significant change has occurred since the mid 1990s i e four years before the introduction of the euro in comparison we run a corresponding analysis in the united states using the 10 federal regions as country equivalents the resulting quasi border effect in the united states is weaker than that in the european union yet its decline by 43 percent is much stronger in the same period we conclude that european integration policy has had little effect on fostering m a cross border transactions

self control for the righteous toward a theory of precommitment to indulgence prior research has examined consumers use of self control to avoid hedonic myopic temptations such as overspending and smoking in this research we investigate the opposite form of self control whereby consumers force themselves to indulge and avoid default forms of spending on utilitarian necessities and or savings in particular consumers who have difficulty choosing items that are perceived as indulgences or luxuries e g a cruise over necessities e g saving for college education and cash in everyday decisions may use precommitments to indulgence especially when the psychological cost of such commitments is less concrete these propositions were tested in a series of studies involving real and hypothetical choices as well as process measures the results indicate that a substantial segment of consumers choose hedonic luxury rewards over cash of equal or greater value consumers typically explain such choices based on the need to precommit to indulgence to make sure that the award does no

tracking costs of time and money how accounting periods affect mental accounting after people incur costs to get future benefits they usually track these costs in their mental accounts and are keen to receive the benefits when they become available we introduce the notion that costs and benefits can occur either in the same accounting period day season etc or in different periods our key argument is that monetary costs are tracked across accounting periods but that temporal costs are written off at the end of the period in which they are incurred thus accounting periods lead to a time money asymmetry in the tracking of costs and consequently in the likelihood of seeking benefits in a laboratory study an online panel study and a field study with movie theater patrons we demonstrate how this relationship among accounting periods cost tracking and benefit seeking is different for time than for money our findings offer insights into the sunk cost effect time money differences and mental accounting

determinants of international student migration this paper considers what factors determine the migration of overseas students when students cross borders for higher education we utilise a gravity model for international student mobility and derive estimates for a sample of 18 countries of destination and 38 countries of origin over the period 2005 11 our results confirm that geographical distance and the presence of a common language are powerful in explaining bilateral student flows our most interesting finding is that time zone differences have a statistically significant and economically large effect in determining international student flows

time zone differences as trade barriers this paper estimates the impact of time zone differences between trading locations on trade costs and trade in general equilibrium using homogeneous bilateral trade data between us states and canadian provinces time zone differences are found to reduce bilateral trade by 11 on average which amounts to about one sixth of the international border effect between the us and canada

on the economics of state lotteries s tate lotteries can be evaluated from either of two perspectives familiar to economists as a consumer commodity or as a source of public revenue l as a commodity the lottery is notable for its broad market penetration and rapid growth sixty percent of the adults in lottery states play at least once in a year the annual growth in real per capita sales in lottery states has averaged 12 percent rising in 1989 dollars from 22 in 1975 to 108 in 1989 as a source of public revenue lotteries account for a rather modest fraction of revenue in states that run them 3 3 percent in 1986 but they are nonetheless one of the most visible state government activities lottery sales exceed those of all other products sold directly by state governments to the public and are larger than all but three major activities of state government education public welfare and highways clotfelter and cook 1989 table 2 5 moreover lotteries are a qualitatively new activity for state governments in that they are a business operated in effect for profit state liquor stores are perhaps the closest analog but they were created to encourage temperate drinking practices and do not engage in the sales promotion and marketing activities that are characteristic of the lotteries lotteries enjoy an honored place in american history as a device for raising funds for public purposes funding for such institutions as the jamestown settlement harvard college and the continental army as well as hundreds of bridges fire houses and schools came from lotteries but after the

the budget contraction effect how contracting budgets lead to less varied choice how do consumers adjust their spending when their budget changes a common view is that the allocation of one s current budget should not depend on previous budget allocations contrary to this the authors find that when the budget contracts to a particular level consumers select less variety as measured by the number of different items with some of the budget allocated to them than when their budget expands to that same level this budget contraction effect stems from a reduction in variety under the contracting budget not from variety expansion under the expanding budget evidence from five experiments indicates that the effect is driven by a desire to avoid feelings of loss associated with spreading allocation cuts relative to reference quantities from previous allocations across many items

evolution of bilateral capital flows to developing countries at intensive and extensive margins motivated by the rise in capital flows to low income countries lics we examine the nature of these flows and the factors affecting foreign investors decision recognizing the presence of fixed investment costs we analyze capital flows at both intensive and extensive margins to fix ideas we resort to the gravity literature for the estimating relationships which we embed into a two tier econometric framework with cross sectional dependence our main finding is that market entry costs are statistically and economically very detrimental to lics we also obtain the gravity type relationship for the destination income unconditionally but not after conditioning on relevant variables as well as establish labor productivity as a robust attractor of capital inflows

evidence for the effect of monitoring costs on foreign direct investment abstract a proposed reason for the significant inverse relationship between distance both physical and cultural and foreign direct investment is the increased costs for a parent firm to monitor an affiliate when there is greater distance between them we provide the first direct test of this hypothesis using o net data on occupational skills to construct industry level measures of the importance of monitoring related skills we exploit this cross industry variation to examine whether physical and cultural distances have a greater impact on cross border m a in industries where monitoring related skills are more important using data on worldwide cross border m a activity from 2005 through 2014 we find significant evidence for the effect of monitoring costs on cross border m a activity we also show that the relatively low importance of monitoring related costs in manufacturing industries compared to those in other sectors is an important factor in explaining why cross border m a in manufacturing is so large despite its relatively small share in most countries

the red and the black mental accounting of savings and debt in the standard economic account of consumer behavior the cost of a purchase takes the form of a reduction in future utility when expenditures that otherwise could have been made are forgone the reality of consumer hedonics is different when people make purchases they often experience an immediate pain of paying which can undermine the pleasure derived from consumption the ticking of the taxi meter for example reduces one s pleasure from the ride we propose a double entry mental accounting theory that describes the nature of these reciprocal interactions between the pleasure of consumption and the pain of paying and draws out their implications for consumer behavior and hedonics a central assumption of the model which we call prospective accounting is that consumption that has already been paid for can be enjoyed as if it were free and that the pain associated with payments made prior to consumption but not after is buffered by thoughts of the benefits that the payments will finance another important concept is coupling which refers to the degree to which consumption calls to mind thoughts of payment and vice versa some financing methods such as credit cards tend to weaken coupling whereas others such as cash payment produce tight coupling our model makes a variety of predictions that are at variance with economic formulations contrary to the standard prediction that people will finance purchases to minimize the present value of payments our model predicts strong debt aversion that they should prefer to prepay for consumption or to get paid for work after it is performed such pay before sequences confer hedonic benefits because consumption can be enjoyed without thinking about the need to pay for it in the future likewise when paying beforehand the pain of paying is mitigated by thoughts of future consumption benefits contrary to the economic prediction that consumers should prefer to pay at the margin for what they consume our model predicts that consumers will find it less painful to pay for and hence will prefer flat rate pricing schemes such as unlimited internet access at a fixed monthly price even if it involves paying more for the same usage other predictions concern spending patterns with cash charge or credit cards and preferences for the earmarking of purchases we test these predictions in a series of surveys and in a conjoint like analysis that pitted our double entry mental accounting model against a standard discounting formulation and another benchmark that did not incorporate hedonic interactions between consumption and payments our model provides a better fit of the data for 60 of the subjects the discounting formulation provides a better fit for only 29 of the subjects even when allowing for positive and negative discount rates the pain of paying we argue plays an important role in consumer self regulation but is hedonically costly from a hedonic perspective the ideal situation is one in which payments are tightly coupled to consumption so that paying evokes thoughts about the benefits being financed but consumption is decoupled from payments so that consumption does not evoke thoughts about payment from an efficiency perspective however it is important for consumers to be aware of what they are paying for consumption this creates a tension between hedonic efficiency and what we call decision efficiency various institutional arrangements such as financing of public parks through taxes or usage fees play into this tradeoff a producer developing a pricing structure for their product or service should be aware of these two conflicting objectives and should try to devise a structure that reconciles them

discounting time and time discounting subjective time perception and intertemporal preferences abstract consumers often make decisions about outcomes and events that occur over time this research examines consumers sensitivity to the prospective duration relevant to their decisions and the implications of such sensitivity for intertemporal trade offs especially the degree of present bias i e hyperbolic discounting the authors show that participants subjective perceptions of prospective duration are not sufficiently sensitive to changes in objective duration and are nonlinear and concave in objective time consistent with psychophysical principles more important this lack of sensitivity can explain hyperbolic discounting the results replicate standard hyperbolic discounting effects with respect to objective time but show a relatively constant rate of discounting with respect to subjective time perceptions the results are replicated between subjects experiment 1 and within subjects experiments 2 with multiple time horizons and multiple descriptors and with different measurement ord

discount rates inferred from decisions an experimental study two hundred and four students of economics and finance participated in an intertemporal choice experiment which manipulated three dimensions in a 4 4 4 factorial design scenario postponing a receipt postponing a payment expediting a receipt expediting a payment time delay 0 5 1 2 and 4 years and size of cashflow 40 200 1000 and 5000 individual discount rates were inferred from the responses and then used to test competitively four hypotheses regarding the behavior of discount rates the classical hypothesis asserting that the discount rate is uniform across scenarios time delays and sums of cashflow was flatly rejected a market segmentation approach was found lacking the results support an implicit risk hypothesis according to which delayed consequences are associated with an implicit risk value and an added compensation hypothesis which asserts that individuals require compensation for a change in their financial position

hourly payment and volunteering the effect of organizational practices on decisions about time use we examine how organizational practices making an economic evaluation of time salient such as hourly pay can lead people to spend less time on uncompensated work volunteering using nationally representative survey data in study 1 we showed that with other factors that might affect time decisions controlled people paid by the hour were both less likely to volunteer and spent less time volunteering than counterparts who were not paid hourly study 2 showed that having people calculate their hourly wage was associated with decreased willingness to volunteer and that this experimental manipulation only affected people not paid by the hour because work organizations are typically institutionalized in every sense of that term scott 1995 with their management practices often assuming a taken for granted quality e g zucker 1977 people can learn decision rules and ways of thinking at work that they may then take with them into other spheres of their lives specifically people may develop a particular psychology of time and come to make different decisions about time use depending on the management practices relevant to the evaluation of time to which they are exposed although we believe that management practices and the dimensions of decisions about time that they may affect are many we begin our inquiry by focusing on the effects of hourly payment on the decision to volunteer time we argue that being paid by the hour almost inevitably makes salient an economic frame for the evaluation of time being compensated on an hourly basis predisposes people to assess how they spend their time in terms of the monetary returns from their decisions e g evans barley kunda 2004 we further argue that this monetary or economic frame surrounding time use is particularly relevant for decisions about work and work like activities in this article we focus on volunteering a theoretically important class of work that is freely undertaken without remuneration tilly tilly 1994 because volunteering has been defined as work done without pay it is logical to argue that to the extent that the practice of hourly payment increases the salience of the economic evaluation of time people paid by the hour should be less willing to volunteer and should volunteer less of their time than those not paid by the hour we used a large nationally representative survey with numerous control variables as well as an experiment in which people calculated their hourly wage to illustrate the effect of the framing of compensation on decisions about time use

choice based on reasons the case of attraction and compromise effects building on previous research this article proposes that choice behavior under preference uncertainty may be easier to explain by assuming that consumers select the alternative supported by the best reasons this approach provides an explanation for the so called attraction effect and leads to the prediction of a compromise effect consistent with the hypotheses the results indicate that 1 brands tend to gain share when they become compromise alternatives in a choice set 2 attraction and compromise effects tend to be stronger among subjects who expect to justify their decisions to others and 3 selections of dominating and compromise brands are associated with more elaborate and difficult decisions

time zones matter the impact of distance and time zones on services trade given the need for proximity in the provision of many services factors such as geographical distance place a higher cost burden on the delivery of services in foreign markets as compared to goods trade in addition differences in time zones add significantly to the costs of service transactions decomposing the impact of distance into a longitudinal and latitudinal component and accounting for differences in time zones it is possible to identify in detail the factors driving the impact of increasing coordination costs on the delivery of services through foreign affiliates working with a bilateral us data set on foreign affiliate sales in services this paper examines the impact of time zone differences and east west and north south distance on us outward affiliate sales by employing a hausman taylor model for services trade by foreign affiliates both distance components as well as time zone differences have a significant positive effect on foreign affiliate sales by decomposing the effect of distance the results show that increasing east west or north south distance by 100 km raises affiliates sales by 2 per cent regarding time zone differences the findings suggest that affiliate sales increase as hourly time zone differences get larger

consumer choice strategies for comparing noncomparable alternatives research on consumer choice has focused on easily comparable alternatives a subset of the choices consumers regularly face this paper outlines the problem and two general strategies for comparing noncomparable alternatives a subset of choices that has been overlooked in the literature experiments are reported that support use of the strategies

yes but this other one looks better works better how do consumers respond to trade offs between sustainability and other valued attributes consumers are increasingly facing product evaluation and choice situations that include information about product sustainability i e information about a product s relative environmental and social impact in many cases consumers have to make decisions that involve a trade off between product sustainability and other valued product attributes similarly product and marketing managers need to make decisions that reflect how consumers will respond to different trade off scenarios in the current research we study consumer responses across two different possible trade off scenarios one in which consumers face a trade off between product sustainability and hedonic value and another in which they must trade off between product sustainability and utilitarian value our results suggest that overall consumers are more likely to trade off hedonic value e g esthetics for sustainability than to trade off utilitarian value e g functional performance for sustainability in studies 1a and 1b we presented participants with a product choice task and also measured their anticipatory emotions as they contemplated their options the results suggest that given a trade off consumers are more likely to choose a sustainable product when they have to trade off hedonic value than when they have to trade off utilitarian value further these studies provide some insight into the emotions underlying this effect in study 2 we use a different consumer response measure relative purchase likelihood and investigate the effect of trade off type across categories that vary in the degree to which hedonic and utilitarian attributes are perceived to be important referred to as product type our results suggest that the effect of trade off type still holds yet is moderated by product type such that consumers greater willingness to trade off hedonic value vs utilitarian value for sustainability is attenuated as the relative importance of hedonic vs utilitarian attributes increases in addition to building on our theoretical understanding of decision making given trade offs with moral attributes this research is also intended to support managers as they define and choose among various strategic product development and marketing promotion options

anticipation and the valuation of delayed consumption this paper presents a model of intertemporal choice that incorporates savoring and dread i e utility from anticipat ion of delayed consumption the model explains why an individual with positive time preference may delay desirable outcomes or get unpleas ant outcomes over with quickly contrary to the prediction of convent ional formulations of intertemporal choice implications of savoring and dread for savings behavior empirical estimation of discount rate s and public policy efforts to combat myopic behavior are explored the model provides an explanation for common violations of the indepe ndence axiom as applied to intertemporal choice copyright 1987 by royal economic society

global delivery models the role of talent speed and time zones in the global outsourcing industry global delivery models gdms are transforming the global it and business process outsourcing industry gdms are a new form of client specific investment promoting service integration with clients by combining client proximity with time zone spread for 24 7 service operations we investigate antecedents and contingencies of setting up gdm structures based on comprehensive data we show that providers are likely to establish gdm location configurations when clients value access to globally distributed talent and speed of service delivery in particular when services are highly commoditized findings imply that coordination across time zones increasingly affects international operations in business to business and born global industries

the effect of foreign direct investment on international migration does education matter using migration data in 1990 and 2000 we find that inward foreign direct investment fdi in non oecd countries affects the out migration of individuals with tertiary and secondary education to oecd countries originating the investments but has no significant effect on the out migration of individuals with primary education distinguishing between linkage and home effects our results show a dominant home effect of fdi for individuals with tertiary education but a stronger linkage effect for those with secondary education the existing stock of former migrants in foreign countries influences the out migration of individuals with primary education

logistic infrastructure and the international location of fragmented production abstract casual evidence suggests that multinational companies increasingly look for places with adequate transport and logistic infrastructure to locate affiliates that participate in cross border production sharing yet there are no systematic empirical analyses examining how logistic infrastructure interacts with the location decisions made by multinationals most studies on the determinants of fdi address the issue of transportation logistics by examining the impact of distance on the relevant outcome but distance does not capture by itself the quality of the logistic systems in place we overcome this shortcoming in the literature by embedding indicators of infrastructure into an empirical framework that examines whether countries with adequate logistic systems attract more vertical fdi and particularly in industries that are more dependent on logistic services we find that logistic infrastructure positively impacts vertical fdi in addition to the impact typically found on distance a change from the first quartile to the third quartile of the distribution of logistic infrastructure is associated with an average increase in the number of vertically integrated subsidiaries equivalent to 29

the role of headquarters subsidiary geographic distance in strategic decisions by spatially disaggregated headquarters various studies have explored how headquarters hq subsidiary geographic distance affects hq decisions about subsidiaries arguing that such distance causes some strategic options to be selected over others to limit ex post communication costs these studies have implicitly assumed that a multinational s hq is spatially concentrated even though multinationals have increasingly disaggregated their hq internationally we examine how such hq disaggregation changes the role that hq subsidiary geographic distance plays in hq decisions about subsidiaries we argue that hq disaggregation yields multiple hq subsidiary geographic distances all of which are a likely source of ex post communication costs and hence are likely to co determine hq decisions about subsidiaries we discuss several approaches for dealing with these multiple distances and recommend that the first best approach be adopted by future studies to avoid the biased geographic distance effects possibly present in prior studies

the effect of future event markers on intertemporal choice is moderated by the reliance on emotions versus reason to make decisions this research examines how future event markers influence intertemporal choice and it demonstrates across five studies that the number of salient events between a smaller sooner and larger later option impacts patience the direction of the effect depends on whether the individual relies on emotion versus reason to make decisions for those who rely on emotion additional events increase patience conversely for individuals who rely on reason additional events decrease patience these effects are driven by perceptions of time as events contract perceptions of time for emotional decision makers but expand perceptions of time for rational decision makers implications arise for intertemporal choice time perception and emotional versus rational decision making

the currency composition of international portfolio assets in this paper we empirically assess the importance of gravity type variables and measures of macroeconomic and financial volatilities in explaining portfolio holdings denominated across the main global currencies us dollar usd euro eur pound sterling gbp japanese yen jpy and swiss franc chf our findings underscore the importance of trade ties and common membership euro area we also find that international positions co move with the level of macroeconomic and financial uncertainty importantly we identify heterogeneous patterns at a currency level

strategic investments and the development of multinationals a model of multinational behavior is presented in which either the existence or absence of multinationals can be a nash equilibrium outcome the key determinant is the relationship between plant scale economies a force for geographic centralization and multiplant economies plus transport costs leading to multinationality the model predicts that multinational enterprise production arises when firm specific and transportation costs are large relative to plant scale economies the latter are both a technological and a strategic variable in the entry decision copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

justification effects on consumer choice of hedonic and utilitarian goods abstract people want to have fun and they are more likely to have fun if the situation allows them to justify it this research studies how people s need for justifying hedonic consumption drives two choice patterns that are observed in typical purchase contexts first relative preferences between hedonic and utilitarian alternatives can reverse depending on how the immediate purchase situation presents itself a hedonic alternative tends to be rated more highly than a comparable utilitarian alternative when each is presented singly but the utilitarian alternative tends to be chosen over the hedonic alternative when the two are presented jointly second people have preferences for expending different combinations of time effort and money for acquiring hedonic versus utilitarian items they are willing to pay more in time for hedonic goods and more in money for utilitarian goods the author explores the topic through a combination of four experiments and field studies

consumer choice between hedonic and utilitarian goods abstract in this article the authors examine how consumer choice between hedonic and utilitarian goods is influenced by the nature of the decision task building on research on elaboration the authors propose that the relative salience of hedonic dimensions is greater when consumers decide which of several items to give up forfeiture choices than when they decide which item to acquire acquisition choices the resulting hypothesis that a hedonic item is relatively preferred over the same utilitarian item in forfeiture choices than in acquisition choices was supported in two choice experiments in a subsequent experiment these findings were extended to hypothetical choices in which the acquisition and forfeiture conditions were created by manipulating initial attribute level reference states instead of ownership finally consistent with the experimental findings a field survey showed that relative to market prices owners of relatively hedonic cars value their vehicles more than do owners of relat

waiting time and decision making is time like money time is a resource as such consumers have to make decisions regarding their use of time in the purchase and consumption of goods and services using prospect theory and mental accounting as theoretical frameworks this article investigates whether consumers treat time like money when they make decisions in a series of studies we found that the value of consumers time is not constant but depends on contextual characteristics of the decision situation our results also suggest that in deterministic situations people make decisions involving time losses in a manner consistent with the convex loss function proposed by prospect theory however in decision making under conditions of risk people seem to make risk averse choices with respect to decisions in the domain of time in contrast to the risk seeking behavior often found with respect to decisions involving losses of money we discuss the nonfungibility of time as an explanation for the discrepancy between decisions involving time and those involving money

an empirical study on intertemporal decision making under risk this study compares time preference in the cases of certainty and risk we analyze both matching and choice behavior we find that violations of the stationarity axiom are restricted to matching behavior both for certainty and risk we also compare the discounting of certain and risky outcomes as well as the discounting of gains and losses in matching tasks certain outcomes are discounted more than risky ones we could not confirm these results in a choice task gains and losses are not found to be discounted at different rates

cost conscious the neural and behavioral impact of price primacy on decision making price is a key factor in most purchases but it can be presented at different stages of decision making the authors examine the sequence dependent effects of price and product information on the decision making process at both neural and behavioral levels during functional magnetic resonance imaging the price of a product was shown to participants either before or after the product itself was presented early exposure to price or price primacy altered the process of valuation as observed in altered patterns of activity in the medial prefrontal cortex immediately before making a purchase decision specifically whereas viewing products first resulted in evaluations strongly related to products attractiveness or desirability viewing prices first appeared to promote overall evaluations related to products monetary worth consistent with this framework the authors show that price primacy can increase purchase of bargain priced products when their worth is easily recognized together these results

looming losses in future time perception abstract it is proposed that a future time interval s perceived length will be affected by whether the interval ends with a gain or loss confirming this several experiments indicate that consumers perceive intervals ending with losses as shorter than equivalent intervals ending with gains the authors explore the mechanisms underlying these effects and they identify several parallels between the current effects and loss aversion the authors further show that these changes in time perception influence consumption decisions and they consider the implications of the findings for theories of time perception and intertemporal choice

eliciting time versus money time scarcity underlies asymmetric wage rates marketing strategies are often tied to how consumers spend time e g waiting in lines searching across stores in return for money e g receiving a discount viewing such time money tradeoffs in terms of a reservation wage rate for consumers we identify a wage rate asymmetry between two elicitation procedures a money elicit mel state the minimum amount of money m that you would accept in return for spending a given number of hours t and b time elicit tel state the maximum number of hours t that you would spend in return for accepting a given amount of money m while these procedures are normatively equivalent we propose that tel vs mel wage rates are higher because time scarcity receives a higher weight in tel judgments in eight studies including both hypothetical and real settings we document the wage rate asymmetry the time scarcity process and a downstream consequence of tel vs mel reducing the likelihood of accepting a time money tradeoff we discuss the implications for practice and for research on wage rates time versus money procedural invariance and scarcity

the influence of price discount versus bonus pack on the preference for virtue and vice foods abstract the authors find that consumers prefer a bonus pack to a price discount for virtue foods but they prefer a price discount to a bonus pack for vice foods prior research has shown that all else being equal consumers prefer bonus packs to price discounts the authors propose that this preference does not hold for vice food because consumers cannot generate good justifications for buying such food when a bonus pack is offered because this would mean consuming more of the vice however a price discount on a vice food can be justified because it acts as a guilt mitigating mechanism for virtue foods the absence of both anticipated postconsumption guilt and the resultant need to justify leads consumers to prefer a bonus pack to a price discount the authors demonstrate the proposed effect and test its underlying process across five experiments