The Psychology of Two-Part Tariffs

This paper investigates preferences for two-part tariff pricing plans which require consumers to pay a flat fee plus a per unit surcharge for usage beyond an allowance. People have difficulty estimating the effective cost of a two-part tariff, so they apply heuristics to the most salient attributes. Compared to a normative benchmark of expected cost, these heuristics lead people to excessively choose plans with smaller flat fees, larger usage allowances, and lower overage rates. When these attributes are in conflict, people assign greater importance to comparisons of the two attributes that provide upside protection against overage charges: the usage allowance and the overage rate. The presence of usage uncertainty heightens the reliance on these comparisons, and calculating a cost does not appear to reduce them

Reducing Satiation: The Role of Categorization Level

People usually like experiences less as they repeat them: they satiate. This research finds that people satiate less if they categorize the consumption episodes at lower levels. For instance, as people ate more jelly beans, their enjoyment declined less quickly when the candy was categorized specifically (e.g., cherry, orange) rather than generally (e.g., jelly bean). Three studies demonstrate this "specificity effect" for people's ratings of enjoyment both during and immediately after consumption. Process evidence shows that subcategorization focuses people's attention on differentiating aspects, making the episodes seem less repetitive and consequently less satiating. (c) 2008 by JOURNAL OF CONSUMER RESEARCH, Inc..

Reducing satiation: The role of categorization level

Experiences generally provide less pleasure as we repeat them---they satiate. Although satiation lowers consumer welfare and limits the consumption of a marketer\u27s product, researchers have identified few techniques to reduce satiation. This paper proposes that satiation depends on perceptions of repetition within a particular category of experiences. By subcategorizing episodes, people can slow the decline in enjoyment from additional consumption. Subcategorization focuses people\u27s attention on aspects that differentiate the episodes, making generally similar episodes seem less repetitive and consequently less satiating. Four studies demonstrate this specificity effect for measures of concurrent and retrospective evaluations of enjoyment, the desire to continue a repeated experience, and predicted satiation

Modes of Enjoyment For Multifaceted Experiences

This research examines how the processing style of multifaceted experiences affects evaluations. When using a constructive mode (seeing components as interwoven), evaluations are greater than either of the individual components. However, when using a deconstructive mode (seeing components independently), evaluations are lower than that of the most liked component

Variety Amnesia: Recalling Past Variety Can Accelerate Recovery from Satiation

Consumers frequently consume items to the point where they no longer enjoy them. In a pilot study and two experiments spanning three distinct classes of stimuli, we find that people can recover from this satiation by simply recalling the variety of alternative items they have consumed in the past. And yet, people seem to exhibit "variety amnesia" in that they do not spontaneously recall this past variety despite the fact that it would result in a desirable decrease in satiation. Thus, rather than satiation being a fixed physiological process, it appears that it is at least partially constructed in the moment. We discuss some of the theoretical implications of these findings and provide some prescriptive measures for both marketers and consumers. (c) 2009 by JOURNAL OF CONSUMER RESEARCH, Inc..