Behavioral Decision Theory by Kazuhisa Takemura

Author:Kazuhisa Takemura
Language: eng
Format: epub
Publisher: Springer Japan, Tokyo

4.2 Purchasing a Calculator and Mental Accounting

Tversky and Kahneman (1981) also asked 192 test subjects the following question on the mental accounting of consumers. They asked 88 test subjects the question below related to conditions surrounding the purchase of a $15 calculator.

Conditions of a $15 calculator: “Imagine the following situation. You are going to purchase a $125 jacket and $15 calculator, but the store attendant tells you that the $15 calculator is sold for $10 at a branch store that is 20 min by car from this store. Would you go to the branch store to buy the calculator?”

They asked the remaining 93 test subjects the question below under the conditions of a $125 calculator.

Conditions of a $125 calculator: “Imagine the following situation. You are going to purchase a $125 calculator and $15 jacket, but the store attendant tells you that the $125 calculator is sold for $120 at a branch store that is 20 min by car from this store. Would you go to the branch store to buy the calculator?”

The two sets of conditions are common as a case of making a decision to purchase a calculator and jacket and identical in the question of whether to do the shopping of $140 in all or go to the branch to save $5 at the cost of driving a car for 20 min. As a result of the questions, although 68 % of the test subjects under the former conditions of the $15 calculator answered that they would go to the branch store, 29 % of the test subjects under the latter conditions of the $125 calculator answered that they would go to the branch store.

This result might be attributable to the fact that the test subjects framed the two decision-making problems separately rather than considering the purchase of the calculator and the purchase of the jacket as a combination, which is another indication that the state of mental accounting is not comprehensive; rather, each topic is processed separately. Recognizing the problem as the question of whether to do the shopping of $140 or $135 in all should make the assessment results of the two sets of conditions identical. In the conditions of the $15 calculator, however, the fact that the calculator whose list price is $15 becomes $10 is presumably emphasized; in the conditions of the $125 calculator, the fact that the calculator’s list price, $125, becomes $120 is emphasized. The cost reduction from the calculator’s list price of $15 to $10 would be valued more than the cost reduction from $125 to $120 if a negative utility function that is convex downward was assumed, just as in prospect theory.

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