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Coupling: the implicit assumption behind sunk cost effect and related phenomena

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  • Bernadette Kamleitner

Abstract

Coupling is the degree to which thoughts of consumption evoke thoughts of payment and vice versa. This mental association is crucial for diverse phenomena like sunk costs but has rarely been addressed in the literature. This article provides a framework for the phenomenon, highlights its theoretical and practical relevance, compiles existing literature, adds empirical findings, and comes up with directions for future research.

Suggested Citation

  • Bernadette Kamleitner, 2008. "Coupling: the implicit assumption behind sunk cost effect and related phenomena," Working Papers 22, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  • Handle: RePEc:cgs:wpaper:22
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    File URL: http://webspace.qmul.ac.uk/pmartins/CGRWP22.pdf
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    References listed on IDEAS

    as
    1. Henderson, Pamela W. & Peterson, Robert A., 1992. "Mental accounting and categorization," Organizational Behavior and Human Decision Processes, Elsevier, vol. 51(1), pages 92-117, February.
    2. Hirst, D. Eric & Joyce, Edward J. & Schadewald, Michael S., 1994. "Mental Accounting and Outcome Contiguity in Consumer-Borrowing Decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 58(1), pages 136-152, April.
    3. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    4. Heath, Chip & Soll, Jack B, 1996. " Mental Budgeting and Consumer Decisions," Journal of Consumer Research, Oxford University Press, vol. 23(1), pages 40-52, June.
    5. Gourville, John T & Soman, Dilip, 1998. " Payment Depreciation: The Behavioral Effects of Temporally Separating Payments from Consumption," Journal of Consumer Research, Oxford University Press, vol. 25(2), pages 160-174, September.
    6. Heath, Chip & Fennema, M. G., 1996. "Mental Depreciation and Marginal Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 68(2), pages 95-108, November.
    7. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    8. Okada, Erica Mina, 2001. " Trade-Ins, Mental Accounting, and Product Replacement Decisions," Journal of Consumer Research, Oxford University Press, vol. 27(4), pages 433-446, March.
    9. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
    10. Arkes, Hal R. & Blumer, Catherine, 1985. "The psychology of sunk cost," Organizational Behavior and Human Decision Processes, Elsevier, vol. 35(1), pages 124-140, February.
    11. Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, vol. 17(1), pages 4-28.
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    More about this item

    Keywords

    coupling; sunk costs; consumer psychology;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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