Measuring the cost of making payment decisions
AbstractThis short paper proposes a simple method of calibrating for the non-monetary costs associated with using different payment plans. These non-monetary costs often lead consumers to choose a flat-rate subscription plan rather than paying separately for each unit of consumption, despite the fact that the pay-per-use plan turns out to be cheaper ex post. The calibration results hint that these costs are relatively higher for "inexpensive" services than for "expensive" services.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).
Volume (Year): 37 (2008)
Issue (Month): 6 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620175
Payment plans Subscriptions Flat rate Local measured service Pay-per-use Mental accounting;
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