The “Lock-In” Effect of Multiple Payments on Defection Decisions Over Time

Danit Ein-Gar, Tel Aviv University, Israel
Irit Nitzan, Tel-Aviv University, Recanati Business School, Israel
In three experiments and a field survey we show that when customers of an on-going service are engaged in multiple-payments program for a supplementary product, they perceive these payments as switching costs, which fade over time, and increase defection intentions. This psychological lock-in experience is demonstrated beyond actual financial constraints.
[ to cite ]:
Danit Ein-Gar and Irit Nitzan (2015) ,"The “Lock-In” Effect of Multiple Payments on Defection Decisions Over Time", in NA - Advances in Consumer Research Volume 43, eds. Kristin Diehl and Carolyn Yoon, Duluth, MN : Association for Consumer Research, Pages: 514-515.