Some marketers offer consumers making a relatively expensive purchase, the option of buying a second, related item for a marginal additional fee. For example, a fashion boutique is offering cashmere coats for sale at $500 each. However, for an additional $25 buyers can also obtain a matching scarf. The uptake rates on such offers is generally good because it is believed that consumers prefer to absorb the cost of the second item into a single purchase, rather than process the cost of the second item separately. This phenomenon is BEST explained by which of the following concepts from behavioural economics?
A) Segregated losses
B) Integrated losses
C) Segregated gains
D) Integrated gains
E) none of the above

Question

Quizplus · Accepted Answer

This phenomenon is best explained by the concept of integrated losses, where consumers prefer to integrate (combine) the costs of purchases to perceive them as a single, less painful expenditure, rather than segregating them into multiple, more painful expenditures.

Some Marketers Offer Consumers Making a Relatively Expensive Purchase, the Option