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Comparison on the effects of prospect theory and information integration theory on consumer's mental accounting on product price

Abstract

The purpose of this research is to find out whether the mental accounting principle of consumers follows the principle of prospect theory and information integration theory. The results of this research are as follows: Firstly, in the case of hedonic bundles, the preference for integration shown in the area of multiple gains supports the integration principle of the information integration theory. In the area of mixed gains, the results support the integration principle, which satisfies both the prospect theory and information integration theory. In the area of multiple losses, the results partially support the prospect theory’s integration principle, whereas the results for the area of mixed losses partially support segregation principle that satisfies both the prospect theory and information integration theory. Secondly, in the case of utilitarian bundles, the result of preference for integration partially shown in the area of multiple gains support the information integration theory’s integration principle. The area of mixed gains supports integration principle that satisfies both information integration and prospect theory. For the area of multiple losses, the results partially support the information integration theory’s principle of preference for segregation. Every condition was responded by indifference in the area of mixed losses. Therefore, the results do not support the segregation principle that satisfies both the prospect theory and information integration theory.

keywords
mental accounting, prospect theory, information integration theory

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