IDEAS home Printed from https://ideas.repec.org/a/kap/mktlet/v34y2023i2d10.1007_s11002-022-09651-6.html
   My bibliography  Save this article

Bitcoin-denominated prices can reduce preference for vice products

Author

Listed:
  • Joowon Park

    (University of Utah)

  • Sachin Banker

    (University of Utah)

Abstract

The growing popularity of bitcoin presents novel research questions related to pricing. Unlike cheques or cards which merely function as alternative methods of payment to cash, bitcoin could also work as an alternative way to denominate prices. In the current research, we examine the effect of price denomination in bitcoin (i.e., setting the price of an item in bitcoin terms rather than in dollars) on purchasing behavior. Specifically, we explore whether denominating prices in bitcoin terms may reduce purchase of non-essential vice items. In a simulated grocery shopping study, we demonstrate that when prices are denominated in bitcoin rather than in dollars, people are less inclined to purchase unhealthy vice food products while equally inclined to purchase virtue food products even when the method of payment accepted by the business is held constant. We further show that the effect stems from participants’ anticipation of greater regret.

Suggested Citation

  • Joowon Park & Sachin Banker, 2023. "Bitcoin-denominated prices can reduce preference for vice products," Marketing Letters, Springer, vol. 34(2), pages 309-319, June.
    • Handle: RePEc:kap:mktlet:v:34:y:2023:i:2:d:10.1007_s11002-022-09651-6
    DOI: 10.1007/s11002-022-09651-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11002-022-09651-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11002-022-09651-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Priya Raghubir & Joydeep Srivastava, 2009. "The Denomination Effect," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 36(4), pages 701-713, December.
    2. Raghubir, Priya & Srivastava, Joydeep, 2002. "Effect of Face Value on Product Valuation in Foreign Currencies," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(3), pages 335-347, December.
    3. Manoj Thomas & Kalpesh Kaushik Desai & Satheeshkumar Seenivasan, 2011. "How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 38(1), pages 126-139.
    4. Soman, Dilip, 2001. "Effects of Payment Mechanism on Spending Behavior: The Role of Rehearsal and Immediacy of Payments," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 27(4), pages 460-474, March.
    5. Feinberg, Richard A, 1986. "Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(3), pages 348-356, December.
    6. Promothesh Chatterjee & Randall L. Rose, 2012. "Do Payment Mechanisms Change the Way Consumers Perceive Products?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 38(6), pages 1129-1139.
    7. Boden, Joe & Maier, Erik & Wilken, Robert, 2020. "The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).
    8. Hirschman, Elizabeth C, 1979. "Differences in Consumer Purchase Behavior by Credit Card Payment System," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 6(1), pages 58-66, June.
    9. Gianluca Scheidegger & Priya Raghubir, 2022. "Virtual currencies: different schemes and research opportunities," Marketing Letters, Springer, vol. 33(2), pages 351-360, June.
    10. Keith Wilcox & Sonja Prokopec & Vicki G Morwitz & Amna Kirmani & Rajesh Bagchi, 2019. "Restraint That Blinds: Attention Narrowing and Consumers’ Response to Numerosity in Self-Control Decisions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 46(2), pages 371-387.
    11. Avni M. Shah & Noah Eisenkraft & James R. Bettman & Tanya L. Chartrand, 2016. ""Paper or Plastic?": How We Pay Influences Post-Transaction Connection," Journal of Consumer Research, Oxford University Press, vol. 42(5), pages 688-708.
    12. Himanshu Mishra & Arul Mishra & Dhananjay Nayakankuppam, 2006. "Money: A Bias for the Whole," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(4), pages 541-549, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Falk, Tomas & Kunz, Werner H. & Schepers, Jeroen J.L. & Mrozek, Alexander J., 2016. "How mobile payment influences the overall store price image," Journal of Business Research, Elsevier, vol. 69(7), pages 2417-2423.
    2. Yizhao Jiang, 2022. "The Influence of Payment Method: Do Consumers Pay More with Mobile Payment?," Papers 2210.14631, arXiv.org.
    3. Zha, Yong & Wang, Yuting & Li, Quan & Yao, Wenying, 2022. "Credit offering strategy and dynamic pricing in the presence of consumer strategic behavior," European Journal of Operational Research, Elsevier, vol. 303(2), pages 753-766.
    4. Khan, Jashim & Belk, Russell W. & Craig-Lees, Margaret, 2015. "Measuring consumer perceptions of payment mode," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 34-49.
    5. Runnemark, Emma & Hedman, Jonas & Xiao, Xiao, 2014. "Do Consumers Pay More Using Debit Cards than Cash? An Experiment," Working Papers 2014:21, Lund University, Department of Economics.
    6. Sarofim, Samer & Chatterjee, Promothesh & Rose, Randall, 2020. "When store credit cards hurt retailers: The differential effect of paying credit card dues on consumers' purchasing behavior," Journal of Business Research, Elsevier, vol. 107(C), pages 290-301.
    7. Marie-Claire Broekhoff & Carin van der Cruijsen, 2022. "Paying in a blink of an eye: it hurts less, but you spend more," Working Papers 760, DNB.
    8. Liu, Yunxin & Dewitte, Siegfried, 2021. "A replication study of the credit card effect on spending behavior and an extension to mobile payments," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    9. Bernadette Kamleitner & Berna Erki, 2013. "Payment method and perceptions of ownership," Marketing Letters, Springer, vol. 24(1), pages 57-69, March.
    10. Arvind Agrawal & James W. Gentry, 2020. "Why do many consumers prefer to pay now when they could pay later?," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(2), pages 607-627, June.
    11. Li, Yi & Pandelaere, Mario, 2021. "The denomination–spending matching effect," Journal of Business Research, Elsevier, vol. 128(C), pages 338-349.
    12. Jean N. Lee & Jonathan Morduch & Saravana Ravindran & Abu S. Shonchoy, 2023. "The Social Meaning of Mobile Money: Willingness to Pay with Mobile Money in Bangladesh," Working Papers 2304, Florida International University, Department of Economics.
    13. Li, Quan & Zha, Yong & Dong, Yu, 2023. "Subsidize or Not: The Competition of Credit Card and Online Credit in Platform-based Supply Chain System," European Journal of Operational Research, Elsevier, vol. 305(2), pages 644-658.
    14. Promothesh Chatterjee & Randall Rose & Jayati Sinha, 2013. "RETRACTED ARTICLE: Why money meanings matter in decisions to donate time and money," Marketing Letters, Springer, vol. 24(2), pages 109-118, June.
    15. Dalla Costa, Aldo Fortunato & Mollica, Vito & Singh, Abhay, 2021. "Payment methods and the disposition effect: Evidence from Indonesian mutual fund trading," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    16. Gilbert, Ben & Graff Zivin, Joshua S., 2020. "Dynamic corrective taxes with time-varying salience," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    17. Anurag Dugar & Mani Shreshtha & Rishabh Jain, 2014. "Cognitive Dissonance as an Effect of Indulging on Credit," Paradigm, , vol. 18(2), pages 155-166, December.
    18. Nenita B. Nagarit, DBA & Susana C. Bautista, EdD & Ferdinand C. Somido, PhD & Pedrito Jose V. Bermudo, PhD & Antonio D.Yango, PhD & Leomar S. Galicia, PhD, 2018. "Transforming Online Negative Blogs in the Use of Credit Cards in Electronics Transactions into Constructive Action: Basis of Creating Business Spend Analyzer Model," Journal of Business & Management (COES&RJ-JBM), , vol. 6(1), pages 66-83, January.
    19. Zeballos, Eliana & Mancino, Lisa & Lin, Biing-Hwan, 2020. "Does how you pay influence the share of healthy items that you Buy? Assessing differences in nutritional quality of food purchases by payment type," Food Policy, Elsevier, vol. 92(C).
    20. Dilip Soman & Amar Cheema, 2002. "The Effect of Credit on Spending Decisions: The Role of the Credit Limit and Credibility," Marketing Science, INFORMS, vol. 21(1), pages 32-53, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:mktlet:v:34:y:2023:i:2:d:10.1007_s11002-022-09651-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.