Payment Frequency Discount Vs. Payment Amount Discount: the Framing Effect on Preference Reversal

Ji-Hoon Jhang, University of Colorado, USA
Jungkeun Kim, University of Minnesota, USA
Despite the pervasiveness of multiple payments plans, empirical studies on the effects of different framings of payment plans are scarce. Across three studies, we examined the effect of different framings on consumers’ preferences between the frequency discount and the amount discount. The results from the three studies revealed that: 1) consumers’ relative preference for the frequency vs. amount discount is systematically changed by different framings (Studies 1 and 2); and 2) this preference reversal disappeared when people were asked to provide reasons for their preferences (Study 3). The importance of understanding the role of the framing effect on the price discount is discussed.
[ to cite ]:
Ji-Hoon Jhang and Jungkeun Kim (2009) ,"Payment Frequency Discount Vs. Payment Amount Discount: the Framing Effect on Preference Reversal", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 1021-1023.