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When a quantity of a given resource – such as food,
money, or cigarettes – is physically divided into
smaller quantities, it reduces both the total quantity
consumed and the speed of consumption.
by Dilip Soman and Amar Cheema
The Effects of
Partitioning
on Consumption
you are at a local theater to watch a movie: you make
your customary stop at the concession stand to buy popcorn and
drinks; when you ask for a large bag of popcorn, to your surprise, the
person at the counter hands you the same quantity of popcorn in
three smaller bags, saying that the large bags are out of stock. Would
this odd encounter change the amount of popcorn you eat or the
speed at which you eat it? Our research suggests that it would.
Since the days of Ulysses, human beings have been devising
rules to constrain undesirable behaviour. However, these rules are
sometimes broken, leading to consequences that we would otherwise avoid. We recently studied situations in which individuals try
to avoid consuming a given pool of resources including money and
food, and found that the ‘packaging’ of the resource plays a significant role in our ability to exert self control.
In particular, we studied the effect of partitioning a larger
amount of resources into several smaller amounts. The term partitioning refers to the act of creating subsets of the resource by
adding artificial physical boundaries around it. For example, a
$50 gift card may be presented as one $50 card, or as two cards,
each worth $25. In the latter case, $50 has been partitioned into
two smaller amounts of $25. Each partitioned amount is a ‘pool
of resources.’
IMAGINE THAT
The rules used by individuals to control consumption require
the exertion of willpower to control impulsive short-term behaviour in favor of longer-term benefits. When the resource in
question is money, examples of such rules might include not spending more than one’s current income; pre-committing to spending
limits; or having a monthly savings target. People follow such selfimposed rules because failure to do so is associated with negative
emotions: breaking such rules can lead to guilt, regret, a feeling of
failure, or a loss of faith in oneself. We label this psychological cost
of breaking a personally-imposed rule a ‘transgression cost.’
We have found that consumers incur such transgression costs
whenever they break rules or pre-commitments. These rules may
relate to not using resources for purposes other than the ones they
are earmarked for (e.g., using retirement savings to buy a new car)
or over-consuming a resource (e.g., eating too much chocolate). In
either case, partitioning a large pool of resources into smaller ones
increases the number of available ‘pools:’ the greater the number of
closed pools the consumer has to break open, the larger the transgression cost, and the less likely the individual is to consume.
However, once individuals do break open a resource pool and incur
the related transgression cost, we have found that they may more
readily consume the remaining resources in that pool.
Rotman Magazine Spring 2008 / 21
The greater the number of closed pools
that a consumer has to break open,
the larger the transgression cost, and
the less likely they are to consume.
The Psychological Costs of Consumption
Whenever consumers make spending decisions, they must first
choose which pool of resources to use, and then whether to engage
in the transaction. While these two components of the decision
have typically been considered as inseparable, an increasing body
of research suggests that the psychological cost associated with the
identity of the resource pool plays an important role in the decision-making process.
For instance, once individuals absorb the up-front ‘pain of payment’ associated with buying casino chips or a foreign currency,
subsequent spending of these currencies is made easier, making
them feel like ‘funny money.’ In a similar vein, consumers may earmark some money for spending, absorb the psychological cost of
doing so, and transfer it into the ‘spending money’ account. The
underlying assumption is that there is a relatively large fixed cost of
opening a resource pool (i.e., deciding to spend from it) and a small
variable cost of consuming an incremental unit from the open pool.
As a result, once the cost of using money from certain sources has
been incurred, the actual transaction decisions are not psychologically painful. One corollary of this account is the fact that it is
easier for an individual to spend $X from a given pool than $X/2
from each of two separate pools.
The rules that govern our behaviour may be externally imposed
by those who propose to have our best interests in mind, or internally construed by individuals as we perceive a need for them. In
the absence of external limits, we may try to control spending by
the exertion of self-imposed principles that favour long-term benefits over short-term gain. Internal rules evolve over time from
repeated tradeoff decisions. For instance, we may try to avoid
opportunities for temptation, hold illiquid assets, sign binding contracts and seek other forms of ‘tying oneself to the mast.’
When the trade-off between short- and long-term benefits is
not readily apparent, guiding principles are often used in decisionmaking, such as when making the decision whether or not to eat
too much chocolate, or to pick up an expensive magazine at the
22 / Rotman Magazine Spring 2008
grocery store check-out. Other examples of applying limits to oneself include diets, monthly savings targets, and resolutions to
smoke only after meals or to jog twice a week. However, exerting
self-control is psychologically costly: there is an expenditure of
willpower to making decisions according to principles. On the
other hand, people who break rules experience guilt, regret, a feeling of failure, and a loss of faith in themselves.
The psychological cost of breaking personal rules (transgression cost) may be a result of Pavlovian-style conditioning: people
look to their own choices as signals of what kind of person they are,
so engaging in a constrained activity may lead them to a feeling that
they have let themselves down. Violations that may result in feelings of guilt or remorse include not using resources for purposes
other than the ones for which they are earmarked (such as using
retirement savings to buy a car), or over-consumption (such as eating too much dessert). In either case, partitioning can play a role in
curbing unwanted behaviour: the greater the number of closed
pools that a consumer has to break open — whether the resource is
money in a savings account, a bag of chips, or a pack of cigarettes —
the larger the transgression cost, and the less likely the individual
is to consume.
Critical to the argument that people employ self-control
devices to monitor their consumption is the notion that individuals are – in the language of economists Matt Rabin and Ted
O’Donoghue – sophisticated, yet dynamically inconsistent. In
simple English, this means that individuals are tempted to consume
when it is not in their best interests, but that they are aware of this
shortcoming. They can impose control on their behaviours when
they are cognitively vigilant, and are consciously making decisions
about whether to consume or not.
However, the manner in which resources are packaged might
not allow for such vigilance: when a large bag of popcorn is opened,
it is difficult to imagine any movie-goer making a conscious decision
about whether or not to eat the next kernel of corn. Rather, we reach
a state of ‘mindless habituation’ and continue consuming – unless
some external constraint forces us to stop and think. When the
movie-goer scratches at the bottom of a small bag to find the popcorn all gone and realizes that she now needs to actively decide
whether or not to open the next bag, the sophisticated consumer
decides that it would be now prudent to stop consuming. Therefore,
partitions work in curbing consumption because they give consumers a decision point – an opportunity to stop and think about
whether to consume or not. As such, partitions move consumers
from a mindless to a thoughtful mode of information processing.
Our research
We tested the effect of partitions on spending and consumption
across five studies and found exactly what we predicted. The first
three studies measured transgression costs and explored their
mediating role on the effect of partitioning on spending. We then
demonstrated the effect of partitioning in two real consumption
settings: consumption of chocolate and use of pre-paid phone cards.
In one study, a number of participants volunteered to participate in a cookie-tasting study. Every participant received an
identical box of 24 cookies and was asked to consume them over
time, noting how much they liked the cookies and when they ate
them. Unknown to them, there were differences across participants: some participants (let’s call them Box A) received 24 cookies
in a box; others, who received Box B, got the same box and the same
cookies, but each cookie was individually wrapped in foil. We
found that the typical consumer of Box A took six days to finish the
cookies, while those that got Box B took 24 days to finish. A simple
sheet of thin foil paper had the power to slow down consumption
by a factor of four! We tried varying packaging of biscuits, chocolate and popcorn and found the same results.
Interestingly, we found similar results when we partitioned
money. In one study, students were given $100 cash coupons to participate in a gambling study – an activity that is considered fun but
somewhat ‘sinful.’ Some students were given all $100 coupons
sealed in one envelope, others were given 10 coupons in each of $10
sealed envelopes. We found that once the big envelope was opened,
it became easier to spend the $100 coupons. However, with the
smaller envelopes, people tended to spend much less – in one study,
about half as much.
In an ongoing series of studies with daily-wage labourers who
receive cash wages, we found that giving them cash divided into
sealed envelopes increased their savings rates dramatically as compared to giving them a single wad of notes. And in an analysis of
data from prepaid calling cards, we found that people who purchased five $10 cards rather than one $50 card spaced out their
phone calls over a longer period of time.
In one study, participants were presented with a scenario in
which they were saving up for their retirement. As a part of this
program, they recently put $5,000 in savings at an annual interest
rate of three per cent, for a minimum of 10 years. A portion of the
participants were told that they had simply saved $5,000 – while
the other group was told that the money had been invested in a certificate of deposit (CD), either one $5,000 CD, or two valued each
at $2,500. All participants were then told they come across a promotion by a local car dealership for a car that they have been
thinking of buying for some time. The discounted price was attractive, but the promotion would expire at the end of the month, and
required a cash down payment of $5,000. The only cash they had
for the down payment was that which they put in the CDs.
We expected that participants who had to break open two
deposits to buy the car would experience higher transgression
costs than those who had to only break open one deposit. We also
expected that those who were aware of the artificiality of the partition involved – that the bank’s highest valued CD was valued at
$2,500 – would experience lower transgression costs. The data
supported both expectations: the impact of partitions on the
spending decision was reduced when the artificiality of these partitions was highlighted.
Another study demonstrated the effect of partitioning on the
consumption of food. Participants received a sealed box containing
six pieces of different types of chocolate. They were asked to eat
the chocolates over the following week, and to return the response
sheet after finishing all the pieces. The packaging of the chocolate
varied. Half the participants received a sealed box containing
unwrapped pieces: breaking open the box allowed them to access
all six pieces unhindered. The remaining participants received
sealed boxes containing pieces that had been individually wrapped
in foil. The data revealed that participants took significantly fewer
days to eat the unwrapped chocolate pieces. The type of chocolate
did not affect the speed of consumption and was not a factor. Only
the packaging significantly affected results; once again, partitioning was shown to inhibit consumption.
Our final study explored how partitioning pre-paid telephone
calling cards into different pools affected their usage. According to
the scenario, the seller of the phone cards would often run out of
large denomination ($50) cards, and instead give customers multiple small cards (5 x $10). Card users were charged a flat rate per
minute of their call and there were no other usage fees. We expected that individuals who received several smaller-denomination
cards would use them significantly less than those who received the
$50 cards, because of the transgression cost associated with breaking open a pool (i.e. using a new card). The data supported this
hypothesis: consumers who had one resource pool (a large denomination card) used it up much faster than those who had several
smaller resource pools.
Taken together, our findings paint a consistent picture of the
impact of partitioning on transgression costs and consumption. The
first three studies demonstrate that partitions trigger transgression
costs, which then influence spending. They also identify the moderating role of partition artificiality: highlighting artificiality lessened
Rotman Magazine Spring 2008 / 23
For consumers, the message is
simple: for consumption that you
want to control, the simple act
of partitioning a resource will help
curb consumption.
transgression costs, reducing the impact of packaging. The final two
studies looked at the effect of partitions on consumption in the real
world. Since these latter studies used fewer controls and were conducted in a real world environment, they were more successful in
ruling out the possibility that another, unknown behavioural factor
was swaying the results.
Across our studies, participants appeared to be averse to opening pools of resources when doing so required them to break
external or internal rules. Partitioning one large pool of resources
into several smaller resource pools consistently decreased spending
and consumption.
Consumers frequently exercise self-control to avoid using certain pools of resources for current expenditures through such
devices as savings accounts and credit cards. However, once they
incur the transgression cost to overcome their own rules and break
open these pools of resources, they may be insensitive to the
amount consumed from each resource pool.
Implications
Our results have significant implications for consumers who start
spending from ‘closed pools’ such as savings accounts, or who
break pre-set spending rules. Such consumers risk engaging in a
‘spending spree’ from the opened pool without restraint once the
initial transgression cost is endured.
Possible parallels exist with research on the ‘shopping momentum effect,’ which details how the momentum from one purchase
makes a subsequent purchase more likely. Our research demonstrates that this effect may persist only while the consumers are
spending from the opened pool of resources. If they have to break
open another pool, and incur the associated transgression cost, this
effect could be diminished.
Our results are also consistent with theories about the counterproductive effect of goals, where exceeding a pre-committed-to
24 / Rotman Magazine Spring 2008
spending limit deteriorates subsequent performance. As we have
indicated, breaking open a pool leads the individual to incur the
transgression cost, and subsequent spending from the opened pool
becomes easier.
The behaviour we describe here is also indicative of crossing a
‘bright line’ – such as in the example of an alcoholic who swears to
never drink again, but does so – which decreases the individual’s
belief in him or herself being able to follow that rule in the future,
placing that person on a ‘slippery slope’ of future rule violations.
In closing
For marketers, our results suggest that simple forms of packaging have the ability to create dramatic variations in consumption.
For consumers, the message is simple – for consumption that you
want to control (but that is tempting), the simple act of partitioning the resource will help curb consumption. This might
mean cutting up food into smaller portions, partitioning money
across smaller ‘stashes’ or adding small costs that force us to
think about consumption. In short, we can divide and conquer
the consumption epidemic.
Dilip Soman is the Corus Chair in
Communication Strategy and professor of
Marketing at the Rotman School of
Management. Amar Cheema is an assistant professor of Marketing at the Olin School of
Business at Washington University.
For a complete copy of the paper from this was excerpted, e-mail
christen@rotman.utoronto.ca
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