While perceiving monetary quantities, consumers tend to lose their ability to estimate an exact amount of money. There exists a specific misleading effect, referred to as quantity distortion, which influences consumers while they perceive an amount of money. This effect leads consumers to lose their ability to correctly estimate quantity and value of cash money– and, likely, its value – as its amount increases. The objective of the present study, aimed at exploring these misleading effects, is to evaluate the perception and accuracy in estimating the quantity of money, as monetary quantities and banknote denominations vary – and, mainly, identifying the threshold value beyond which individuals tend to wrongly estimate quantities of money. Results showed that, even for small monetary quantities, individuals are not able to correctly represent and evaluate monetary quantities. Specifically, under a specific threshold value, an overestimation effect exists, and over a specific threshold value, an increasing underestimation effect occurs. The difficulties in evaluating not only large sums but also small quantity of money and the inability to consider proportionality proved the existence of a quantity distortion effect, that is a generalized tendency to overestimate or underestimate the real extent of monetary quantities. The present study has remarkable implications. From a theoretical viewpoint, it introduces an innovative element in the field of consumers’ perceptual distortions, showing that, besides contextual conditions bounding rationality of consumption choices, an increasing underestimation effect and an increasing overestimation, defined as a quantity and a value distortion, needs to be considered. From a managerial perspective, this study has potential consequences in the marketing field, and, specifically, in pricing strategies of luxury and investment goods and in psychological threshold value price strategies.
Distortion in Consumers' Money Perception: A Study on Values and Quantity
Mileti A
2015-01-01
Abstract
While perceiving monetary quantities, consumers tend to lose their ability to estimate an exact amount of money. There exists a specific misleading effect, referred to as quantity distortion, which influences consumers while they perceive an amount of money. This effect leads consumers to lose their ability to correctly estimate quantity and value of cash money– and, likely, its value – as its amount increases. The objective of the present study, aimed at exploring these misleading effects, is to evaluate the perception and accuracy in estimating the quantity of money, as monetary quantities and banknote denominations vary – and, mainly, identifying the threshold value beyond which individuals tend to wrongly estimate quantities of money. Results showed that, even for small monetary quantities, individuals are not able to correctly represent and evaluate monetary quantities. Specifically, under a specific threshold value, an overestimation effect exists, and over a specific threshold value, an increasing underestimation effect occurs. The difficulties in evaluating not only large sums but also small quantity of money and the inability to consider proportionality proved the existence of a quantity distortion effect, that is a generalized tendency to overestimate or underestimate the real extent of monetary quantities. The present study has remarkable implications. From a theoretical viewpoint, it introduces an innovative element in the field of consumers’ perceptual distortions, showing that, besides contextual conditions bounding rationality of consumption choices, an increasing underestimation effect and an increasing overestimation, defined as a quantity and a value distortion, needs to be considered. From a managerial perspective, this study has potential consequences in the marketing field, and, specifically, in pricing strategies of luxury and investment goods and in psychological threshold value price strategies.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.