When Budgeting Backfires: How Self-Imposed Price Restraints Can Increase Spending

A common strategy for controlling spending is to impose a price restraint on oneself. For example, a consumer who is concerned with limiting expenses may decide before going shopping that he or she only wants to spend approximately $100 for a particular purchase. Although conventional wisdom predicts that self-imposed price restraints will decrease consumer spending, the authors show that salient price restraints can actually increase consumers' preferences for high-priced, high-quality items. The authors propose that making a price restraint salient has the effect of partitioning consumers' evaluations of price and quality, leading to larger differences in perceived quality between options and a greater focus on quality during the final decision. Thus, while budgets and other types of price restraints can limit spending by eliminating some high-priced options from consideration, this research suggests that they can also have the ironic effect of increasing consumers' spending relative to a situation in which consumers have not imposed a price restraint.

• 저널Journal of Marketing Research · 49(2) · 218–230
• 토픽Decision-Making and Behavioral Economics · General Decision Sciences
• DOI10.1509/jmr.10.0508
• 저자Jeffrey Larson, Ryan Hamilton