Business
Why Four Small Payments Feel Cheaper Than One
Partitioned pricing breaks one total into several smaller amounts, and because the pain of paying is felt per payment rather than per purchase, each small number registers as less painful, so the whole purchase feels li…
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Sources behind this episode
- peer-reviewed studyThe Effects of Monetary Magnitude and Level of Aggregation on the Temporal Framing of Price
- peer-reviewed laboratory studiesPennies-a-Day: The Effect of Temporal Reframing on Transaction Evaluation
- peer-reviewed theory and empirical paperThe Red and the Black: Mental Accounting of Savings and Debt
- working paper using transaction data, not peer-reviewedBuy Now, Pay Later Credit: User Characteristics and Effects on Spending Patterns
- peer-reviewed studyDivide and Prosper: Consumers' Reactions to Partitioned Prices
- official government reportBuy Now, Pay Later: Market trends and consumer impacts
