Traditional economic theory suggests that consumers are likely to prepay for a product/ service that appears to be heavily discounted. However, in reality, many consumers do not think and act to achieve that goal. This is evident in consumer's psychological and behavioral responses toward a new type of price promotion, namely social coupons (SCs) (i.e., online coupons that offer consumers a substantial discount with a long redemption period when they prepay for a retailer's products/services). Such responses generate vital impacts not only on consumers themselves in terms of saving maximization but also on service retailers (e.g., sit-down dining restaurants) and SC providers (e.g., Groupon and LivingSocial) in terms of revenue maximization generated from offering SC campaigns. This dissertation aims to provide insights to the literature in price promotions, specifically SCs. Guided by mental accounting theory (i.e., consumers open a mental account when costs are incurred and close a mental account when benefits are received), this dissertation is structured in the form of two separate empirical essays. While Essay 1, "Prepaying Less is Preferable to Saving More: The Role of Pain of Prepayment Aversion in Social Coupon Purchasing Decision", focuses on opening a SC mental account (i.e., cost incurred), Essay 2, "Superfluous Spending: The Role of Neglected Mental Budget Depletion in Spending Decision when Redeeming Social Coupons", focuses on closing a SC mental account (i.e., benefit received). Essay 1 explored why consumers purchase SCs featuring a low-implausible face value (i.e., a face value that is lower than the normal price range expected by consumers for a particular type of service)? Findings across five experiments revealed that consumers' likelihood of purchasing SCs featuring a low-implausible (vs. plausible) face value was greater when a coupon price for SCs featuring a low-implausible face value was lower than willingness-to-prepay for a SC (WTPP-SC), while a coupon price for SCs featuring a plausible face value was higher than WTPP-SC. Furthermore, consumers' likelihood of purchasing SCs featuring a low-implausible face value was greater when a coupon price was lower (vs. higher) than WTPP-SC. Pain of prepayment (i.e., the disutility/imputed cost, painful feeling, generated from the thought of prepaying amount of money required for a SC) aversion was an underlying process. That is, consumers experienced greater pain of prepayment when a coupon price was higher (vs. lower) than WTPP-SC. Pain of prepayment, in turns, negatively influenced consumers' likelihood of purchasing SCs featuring a low-implausible face value. Moreover, consumers' likelihood of purchasing such SCs was greater when time pressure was present (vs. absent) and when semantic cues were abstract (vs. concrete). Finally, when being exposed to multiple SC deals for the same service, which vary in terms of face value plausibility (Option 1: low-implausible face value vs. Option 2: plausible face value), consumers were more likely to choose a SC deal featuring a low-implausible face value (Option 1) when a coupon price for a SC deal featuring a low-implausible face value was lower than WTPP-SC but a coupon price for a SC deal featuring a plausible face value (Option 2) was higher than WTPP-SC. In contrast, when coupon prices for both SC deal options were lower than WTPP-SC, consumers were more likely to choose a SC deal featuring a plausible face value (Option 2). Essay 2 explored why consumers spend a great additional amount of money beyond a SC face value? Findings across three experiments revealed that the amount of money spent beyond a SC face value was greater when consumers redeem SCs featuring a low-implausible (vs. plausible) face value. Neglected mental budget depletion (i.e., the instance in which consumers neglect the fact that the budget assigned to a particular SC mental account as a spending self-control is already depleted) was an underlying process. That is, consumers had a greater tendency to neglect mental budget depletion when redeeming SCs featuring a low-implausible (vs. plausible) face value. Neglected mental budget depletion, in turns, positively influenced the amount of money spent beyond a SC face value. Furthermore, concrete (vs. abstract) semantic cues and far (vs. near) distance between purchasing and redeeming a SC intensified neglected mental budget depletion effect, which in turns, increased the amount of money spent beyond a SC face value when redeeming SCs featuring a low-implausible face value. In conclusion, this dissertation provides theoretical insights on consumers' psychological responses, and their behavioral responses toward SCs during two SC stages, which results in sub-optimal SC decision-makings: (1) purchasing SCs featuring a low-implausible face value (Essay 1); and (2) spending additional money beyond a SC face value when redeeming SCs at a service retailer (Essay 2). The empirical findings across two essays add to the growing body of the literature in price promotions, specifically SCs. This dissertation also provides managerial insights regarding how managers can design and strategically implement SC campaigns that can maximize the number of SC being purchased and the great amount of money consumers spend beyond a SC face value when they redeem a SC at a service retailer.

Submitted by ANA PAULA MIOTTO (ana.miotto@uol.com.br) on 2013-03-21T03:07:18Z No. of bitstreams: 1 Tese_Ana Paula Miotto.pdf: 1382771 bytes, checksum: 0e3f0451328dc1c2bd606d93de1e8dea (MD5) / Approved for entry into archive by Eliene Soares da Silva (eliene.silva@fgv.br) on 2013-03-21T13:17:51Z (GMT) No. of bitstreams: 1 Tese_Ana Paula Miotto.pdf: 1382771 bytes, checksum: 0e3f0451328dc1c2bd606d93de1e8dea (MD5) / Made available in DSpace on 2013-03-21T13:47:47Z (GMT). No. of bitstreams: 1 Tese_Ana Paula Miotto.pdf: 1382771 bytes, checksum: 0e3f0451328dc1c2bd606d93de1e8dea (MD5) Previous issue date: 2013-02-25 / All consumer expenditures compete for the same set of limited resources: individual or household income. Decisions about what to buy, how to pay and how much to save are part of families daily activities, regardless of their income. However, in a context of increased resource constraints many of these decisions are crucial. Combining desires and obligations on a limited budget is no easy task. The household finance management is considered an important task and can have positive consequences for consumers, such as the possibility to save resources for the future, or negative, such as default. This thesis argues that consumers manage their budgets differently. Also, they have personal characteristics that impact this management. Through two complementary studies - the first exploratory and qualitative and the second quantitative the thesis aims to understand the way C class households perform the management of their finances, testing relations between personal characteristics and forms of dealing with finance. And investigate how the occurrence of default or savings is influenced by personal characteristics and the way consumers conduct such management. Two distinct components in the household finance management were identified: the mental budget and income and expenses management . Results of qualitative research point to a larger consumer’s effort in controlling post-consumer spending, with little concern for budget planning. Credit card financing is another feature investigated. The installment payment option is often seen as the only form of acquisition. While the credit card use facilitates the control (all expenses in one account), the possibility of minimum payment, and the difficulty to understand the interest rates, are aspects that bring complexity to the process and could lead consumers to uncontrolled budget and default. Results of the quantitative study, however, indicate a positive relationship between the preference for credit and financial management. 11 Self-control has a positive relation with the management of expenses, as well as the propensity to plan. The management of expenditure, in turn, has a negative relation with the occurrence of default. It was found that revenues and expenses management play a role as a mediator between personal characteristics and default and between the propensity to plan and savings. Encouraging better financial management can have a positive impact on reducing default as increasing savings. Critical events, mainly unemployment and sickness in the family, have a direct influence on the occurrence of default. Acting on these events is difficult because, in most cases, they are unexpected situations. However, encouraging savings for such emergencies should minimize the negative impact of a critical event. Contributions to the theory, practice and public policy are offered and discussed. / Praticamente todas as despesas dos consumidores saem do mesmo conjunto de recursos limitados: a renda individual ou familiar. Decisões sobre o que comprar, como pagar e quanto poupar fazem parte do cotidiano das famílias, independentemente da renda. No entanto, em um contexto de maior restrição de recursos muitas dessas decisões são cruciais. Combinar todos os desejos e obrigações em um orçamento limitado não é tarefa fácil. A gestão das finanças domésticas é considerada uma tarefa importante e que pode ter consequências positivas para os consumidores, como a possibilidade de fazer reservas de recursos para o futuro, ou negativas, como o endividamento e a inadimplência. Essa tese argumenta que os consumidores gerenciam seus orçamentos de forma distinta. Além disso, possuem características pessoais que impactam essa forma de gestão. Por meio de dois estudos complementares – o primeiro exploratório de caráter qualitativo e um segundo quantitativo, procurou-se: entender as formas pelas quais as unidades familiares de classe C realizam a gestão de suas finanças domésticas; testar relações entre características pessoais e formas de lidar com as finanças e investigar como a ocorrência de inadimplência ou poupança é influenciada por características pessoais e pela forma como os consumidores realizam essa gestão. Identificaram-se dois componentes distintos na gestão das finanças domésticas: o orçamento mental e o gerenciamento das receitas e despesas. Resultados da pesquisa qualitativa apontam para um esforço maior das consumidoras em controlar os gastos pós-consumo, com pouca preocupação com o planejamento orçamentário. O uso do cartão de crédito para financiar as compras é outra característica do grupo investigado. O parcelamento do pagamento é visto, muitas vezes, como a única forma de aquisição. Ao mesmo tempo em que o cartão tem o papel de facilitar o controle (todas as despesas em uma única conta), a possibilidade de parcelamento e de pagamento mínimo e, a dificuldade de entender a cobrança de juros, são aspectos que trazem complexidade ao processo de gestão das finanças e que poderiam levar os consumidores ao descontrole do orçamento, ao endividamento e à inadimplência. Resultados do estudo quantitativo, no entanto, apontam para uma relação positiva entre a preferência por crédito e o gerenciamento, sugerindo que indivíduos com essa característica, imprimam um maior esforço no gerenciamento. O autocontrole tem uma relação positiva com o gerenciamento das despesas, assim como a propensão a planejar. O gerenciamento das despesas, por sua vez, tem uma relação negativa com a ocorrência de inadimplência. Testes realizados apontam para o papel mediador do gerenciamento das receitas e despesas na relação entre as três características pessoais investigadas e a ocorrência de inadimplência. O papel mediador do gerenciamento entre a propensão a planejar e a poupança também é apontada pelos testes. É possível considerar que a influência das características pessoais na ocorrência de inadimplência ou poupança, se realiza por meio do gerenciamento das receitas e despesas. Estimular um melhor gerenciamento pode ter um impacto positivo tanto na redução da ocorrência de inadimplência como no aumento da poupança. Eventos críticos, principalmente desemprego e doença na família, têm influência direta na ocorrência de inadimplência. Atuar sobre esses eventos é difícil, já que, na maioria dos casos, são situações inesperadas. No entanto, incentivando a poupança, as reservas para essas situações de emergência estariam asseguradas, minimizando o efeito negativo de um evento crítico. Contribuições à teoria, à prática e para políticas públicas são oferecidas e discutidas.