Download
Filename Size Access Description License

Abstract

In my dissertation research, I explore the psychology of bundling. Bundling is defined as the sale of two or more separate products (i.e., goods or services) in a single package, for a single price. Bundles are typically sold at a discount (relative to the same items offered separately) and can serve as a price discrimination mechanism for firms (Adams & Yellen, 1976; Stremersch & Tellis, 2002). To that end, the limited existing work examining the psychology of bundling has largely focused on how consumers are sensitive to the pricing of the various components of bundles (Hamilton & Srivastava, 2008; Janiszewski & Cunha, 2004; Khan & Dhar, 2010). ,But this literature overlooks how bundling itself might provide utility to consumers beyond just discounts. My dissertation fills this void by suggesting that when multiple products and services are combined and offered as a single unit, consumers view—and, more importantly, value—the resulting entity as a unique “whole” that is greater than the mere sum of the parts. Critically, this distinct and fundamental appeal of bundles yields a number of meaningful implications for consumer decision making. My dissertation explores these implications and comprises three chapters, each of which demonstrates how combining things in the marketplace—both products (Chapter 1 and Chapter 3) and events (Chapter 2)—can serve as an important source of value for consumers. ,In Chapter 1, I examine how combining products into bundles affects valuation. In particular, I demonstrate a novel asymmetric effect: Consumers demand more compensation for and experience greater dissatisfaction from the loss of items from bundles, compared to the loss of the same items in isolation. Yet they express lower willingness-to-pay (WTP) for and experience less satisfaction from items added to bundles, compared to the same items purchased separately. I argue that this asymmetry in valuation (i.e., paying less, yet demanding more) persists because bundling leads consumers to see multiple items as a single, inseparable “gestalt” unit (Koffka, 1935; Köhler, 1970), which consumers find appealing. Consequently, they resist both removing items from and adding items to bundles. ,In Chapter 2, I examine whether people prefer combining events with close others through timing. Specifically, I explore the preference for simultaneity, which I define as the preference for events that happen to the self and to close others to occur at the same time. I propose that people prefer simultaneity because facilitates social connection (Baumeister & Leary, 1995). To that end, the preference for simultaneity is both moderated and mediated by the desire to connect with others. ,Finally, in Chapter 3, I propose that bundles can potentially connect people. My theory of the psychology of bundling argues that people form gestalt impressions of bundles. Consequently, the components of bundles are be perceived as fundamentally connected (i.e., they cohere to form a single, inseparable “whole”). Therefore, it is possible that in social consumption settings, when consumers purchase and consume bundles with each other—when they share parts of the same “whole”—they themselves might feel closer or more connected. This work helps explain preferences for bundles in social consumption settings.

Details

Additional Details

Actions

from
to
Download Full History