| Abstract: | Several theories of decision making are based, in part, upon the principles of psychophysics (Kahneman and Tversky, 1979; Thaler, 1985). For example, due to the psychophysics of quantity, the difference between $10 and $20 seems greater than the difference between $110 and $120. To determine whether psychophysics influences consumers' decisions, subjects in four studies made real or hypothetical purchases. It was predicted that as the size of the purchase increased, subjects would be more willing to buy additional smaller items. Small extra purchases should seem like minor expenditures when they follow larger purchases. Results of the four studies supported our hypothesis. In addition, it was found that subjects responded not only to actual changes in purchase size but also to changes in the presentation or framing of a purchase. |
