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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
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    References listed on IDEAS

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