Segregation EffectOpen Access

Segregation Effect

Positive experiences feel better overall when we spread them out

Whether it’s binging on a box set or mindlessly consuming a whole bar of chocolate, we enjoy things more when split into multiple time chunks.

Thaler (1985). Mental accounting and consumer choice. Marketing science, 4(3), 199-214.

The study

Setup

87 students were told that two men won in lotteries: Mr A won $50 in one lottery and $25 in another. Mr B only entered one lottery and won $75. The students were then asked who they believed to be happier.

Results

Results showed that students believed the segregated Mr A to be happier with his winnings.

Study graph

Key Takeaways

Segregate the good.

Two small gains trump one large one. Be it team victories, feature announcements, product packaging or loyalty benefits, where can you break up the good into smaller, bite-size pieces?

Takeaway image

Highlight silver linings.

Separate a small gain from a larger perceived ‘loss’ to reduce consumer pain. For example, instead of offering a temporary price reduction, offer a special rebate equal to the proposed discount.

Takeaway image

Don't separate too small. We have a low-end threshold below which we experience no joy (Morewedge et al., 2007). Breaking a cookie into crumbs results in almost zero joy. Banks offering current account holders low monthly 'loyalty rewards' would do well to reframe them into larger, more meaningful chunks, or not do it at all. After all, no one wants to be reminded of the meaninglessness of their loyalty.

Takeaway image
Takeaway image
Segregation Effect

Segregation Effect

Positive experiences feel better overall when we spread them out

Whether it’s binging on a box set or mindlessly consuming a whole bar of chocolate, we enjoy things more when split into multiple time chunks.

The study

Setup

87 students were told that two men won in lotteries: Mr A won $50 in one lottery and $25 in another. Mr B only entered one lottery and won $75. The students were then asked who they believed to be happier.

Results

Results showed that students believed the segregated Mr A to be happier with his winnings.

study graph
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Risk Aversion
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Risk Aversion
We don’t like uncertainty and generally stick to what we know
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