Publications
Publications
- 2017
Malleable Monopoly Money: Does How You Pay For A Gift Card Affect How You Spend It?
By: Priya Raghubir and Shelle Santana
Abstract
This research examines the malleability of a specific form of “monopoly” money (viz., Raghubir and Srivastava 2008), gift cards, and shows that the manner in which one purchases a gift card affects its subjective value and subsequent use. Study 1 shows that ‘monopoliness’ is a relative construct, with a wide range of currencies falling along a continuum anchored by cash at one end and airline miles at the other. Studies 2-4 show that, non-intuitively, when a currency is converted into a gift card, the subjective value of the gift card is shaped by the subjective values of both gift cards and of the currency with which it was purchased. As such, gift cards purchased with cash are judged more like money than gift cards of equivalent value purchased using reward points or miles. We refer to this as the Malleable Monopoly Money effect. Implications for companies who issue miles or reward points are discussed. Theoretically, this paper adds to the growing body of evidence that money is not fungible: its form affects its subjective value.
Keywords
Subjective Value Of Money; Economic Psychology; Behavioral Economics; Gift Cards; Money; Value; Perception
Citation
Raghubir, Priya, and Shelle Santana. "Malleable Monopoly Money: Does How You Pay For A Gift Card Affect How You Spend It?" Working Paper, September 2017.