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Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay

Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to... In studies involving genuine transactions of potentially high value we show that willingness-to-pay can be increased when customers are instructed to use a credit card rather than cash. The effect may be large (up to 100%) and it appears unlikely that it arises due solely to liquidity constraints. In addition to demonstrating the effect, we provide a methodology for detecting it, and our findings suggest a source of variance to test alternative explanations. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Marketing Letters Springer Journals

Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay

Prelec, Drazen; Simester, Duncan
Marketing Letters , Volume 12 (1) – Oct 7, 2004
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References (6)

Publisher
Springer Journals
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Business and Management; Marketing
ISSN
0923-0645
eISSN
1573-059X
DOI
10.1023/A:1008196717017
Publisher site
See Article on Publisher Site

Abstract

In studies involving genuine transactions of potentially high value we show that willingness-to-pay can be increased when customers are instructed to use a credit card rather than cash. The effect may be large (up to 100%) and it appears unlikely that it arises due solely to liquidity constraints. In addition to demonstrating the effect, we provide a methodology for detecting it, and our findings suggest a source of variance to test alternative explanations.

Journal

Marketing Letters – Springer Journals

Published: Oct 7, 2004

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