Lost and found: How the conversion between gains and losses impacts consumers' purchase decisions
(A2022-107248)

AUTHORS

Yan Meng, Grenoble Ecole de Management; Stephen J. Gould, Baruch College, The City University of New York; Lei Song, The Pennsylvania State University Abington; Hua Chang, College of Business & Economics, Towson University; Shiva Vaziri, Grenoble École de management

ABSTRACT

People add value to rediscovered objects because they convert the pain of losing the objects to pleasure upon finding them again. When consumers thought they missed a discount but eventually were able to get the deal, they perceive that they have obtained more value. Consequently, they are more likely to make purchases with a once-lost discount. Across three studies, the current research shows that mental accounts of gain and loss can be dynamically converted to one another. This conversion effect is mediated by consumers' implemental mindset activated by the conversion and moderated by price. The findings theoretically contribute to the mental accounting research and also have implication for increasing sales in physical and non-physical context.