Cognitive Bias – Denomination effect


The tendency to spend less when holding large currency denominations rather than small denominations.


A person with a one hundred US dollar bill ($100 US) will spend it slower than one hundred one dollar ($1) bills.


If you want to be a saver or negotiate tougher in a cash based transaction, carry larger bills in your wallet or purse. This research published by Priya Raghubir and Joydee Srivastava appeared in the Journal of Consumer Research, Volume 36, Issue 4, December 2009, Pages 701-713.

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