Pain of Paying: Antecedents and Consequences

From a standard economic perspective, one should make a purchase if the benefit a good provides exceeds its cost. However, past literature has documented that pain of paying, or the negative affective response to parting with one's money, may interfere with this utility maximization.. To date, research in this area has primarily explored how the payment mechanism influences pain of paying. For example, people experience more pain paying with cash versus credit card, after versus before consumption, or per use versus as a lump sum. However, this session proposes that drivers of pain of paying are much richer than the payment mechanism. Further, pain of paying can have surprising and important effects on consumer preferences. This work contributes by better understanding factors influencing the choice overload paradigm. An increasing choice set size alone may not always produce choice overload effects but rather may be due in part to an interaction between the size of the choice set and the (anticipated) pain of payment when purchasing. Thus, pain of payment may serve as a cue of how much one should search or engage in a maximization in order to find the right alternative.