Based on the theory of mental accounting, this study explores the differences in consumer choices between pay by year and pay by months.
Tahler (1999) consolidated mental accounting matters, the paper mentioned in a short paragraph to illustrate the relationship between payment methods and mental accounting. This study finds that mental accounting focuses on the development of the current compound choice problem, and does not much consider the impact of intertemporal consumption in the decision-making process.
In order to simplify the variability and increase the operability of this study, the annual payment and monthly payment are used as the payment option, and the intertemporal discount rate is used as the moderator variable.
In the literature review section, we found that the consideration of losses in mental accounting does not only represent the cost of money, but also the transaction utility. In order to explore the impact of transaction utility in this decision-making process, product familiarity is set as the second adjustment variable.
With the support of the hedonic framing in mental accounting, we expect to see the subject's preferences for pay by years and to illustrate the impact that due to the above two moderator variables of the decision-making process.
In summary, the research architecture diagram proposed in this study is as follows:
Figure 3.1 Research Architecture
Product and Subject Product
We can find that in recent years, researchers have done a lot of research on whether people behave consistently online and offline. Though there are some research claims that the behaviors are consistent. For example, Gosling and Augustine(2011) believed that consistent with socialization in offline contexts, extraverts people seek out virtual social contact and engaged during the online social experience. High openness subjects are also expressed as it is in the offline-world with evidence of exploring new activities, experiencing new people, and changing the photographic scenery. Thus, rather than being an escape from reality, online social network sites exist as a microcosm of people's larger social worlds. However, in the market research report, we always find the difference between behavior online and offline. That is a big reason that the Omni-channel model is advocated. The advent of online channels and new other digital channels such as mobile channels and social media has changed the retail business model and the behavior of shoppers. (Verhoef, Kannan, et al. 2015)
In order to simplify the bias of consumers' inconsistent online and offline behaviors, this research will study the field structure on a streaming platform, a payment and use online transaction behavior. In the field of behavioral economics, research is often difficult due to the variability of the consumer environment. Based on this research design, we can more accurately measure consumer behavioral decisions.
To illustrate more, online streaming website, as a young service in recent years, is because of video content as entertainment broadly shows in our life, is easy to imagine. In our study, subjects were asked to imagine a specific scenario, a product that was easier to imagine would make the answers more correspond to realistic decision making. The other reason is to reduce the error due to preference. Website, as a platform with compared neutral preferences, should be less variation of consumer preference. This attribute helps us reduce the variation in consumer willingness caused by consumer preferences.
On the other hand, streaming platforms are a service that is booming, this study, in the results, expects to find out if there are some different consumer behaviors from traditional industry those are proposed by previous research.
Subject
To enhance maneuverability, the questionnaire is written in Chinese and takes Taiwanese as the main research subject.
Thought the research involves some professional knowledge, there has no restriction on subjects. Because our research is focused on a living consumer decision making that anyone may have to face.
Data Collection
In this study, convenience sampling was used to collect questionnaires. In order to increase the randomness of sampling, the questionnaire launched as an online questionnaire and diffusion through sundry social media includes Facebook, Instagram, PTT, and Line.
After our effort, a total of 237 replies was collected during the one-week distribution period.
Questionnaire Design
To illustrate a streaming website, an introduction and scenario are written at the beginning of the questionnaire:
Please imagine that you are considering buying a membership for an “ online streaming website”. The website offers sundry TV programs, movies, animations, and documentaries those launched in Taiwan and abroad, including Japan, Korean, American, and China. You can enjoy profuse wonderful content just in one stop!
Now, you can enjoy yourself anytime, anywhere and unlimited with a no-ad-disturbed watching time, as long as paying a cost-effective membership fee.
Our website offers two kinds of payment: pay by years and pay by months. Year fee means to pay NT$3600 in one time, and month fee indicates pay NT$300 every month.
Honestly, this questionnaire is hard for subjects. Especially, for example, be asked to answer the country of origin of specific series. Thus, the order of the topics is arranged by importance and complexity. After the scenario, the questionnaire composes of four
topics. At the beginning of the questions first asks the preference of subjects’ payment choices, which is the most important question of the research. Following, a series question of product familiarity appeared in the form of cloze and multiple-choice, which is the most complicated part of the questionnaire. Third, the alternative discount rate question group needs to be answered. Finally, demographic-related questions are the last part of the questionnaire.
Payment Preference
Different from alternative monthly and annual fee choices, a six-scale linear multiple-choice question was designed to allow the subjects to present how much their preferences of the payment choice.
Figure 3.2 Question format of the payment preference.
This design allows our analysis can both run in a constant and inconstant way. Also, as a materiality level question, the degree implies the specific level of the subject’s trade-off between the two payments.
Product Familiarity
Reference by the questionnaire that Rao and Monroe (1988) launched. In our research, product familiarity test by the subject’s previous experience, information searching experience, owing status, and product knowledge.
There are twelve questions about product familiarity. Including three questions about previous experience, three questions about knowledge of streaming, three questions about knowledge of streaming service environment, and three questions about knowledge of streaming content. For example, subjects are asked to choose the right definition of OTT (over-the-top media service, another name of streaming service ).
These questions, like test papers, accumulate subjects' familiar scores. However, unlike the exam, we encourage participants to do their best to answer but do not guess the answer.
Discount Rate
For intertemporal discounting, the divergence might since using a different measure. In our experiment, participants being asked to do the trade-off between a series of alternative choices. Picked between "today" and "a specific later" options in 27 scenarios with varying rewards and delays. The method is launched by Kirby et al. in 1999. In our scenario, we changed the unit from USD to NT with a currency exchange rate: 30.67.
Follow the test rules from Kirby, there is only one question on one page that restricts the subject can only consider the conditions of one question, and also, they are required do not modify the previous answer once after making the choice.
Demographics
There is evidence that the discount rate varies with income and other personal characteristics. Both Gilman and Black found that personal discount rates decline with income, education, and age (Warner & Pleeter, 2001). In our research, reference from previous studies, four demographics information be collected: age, education level, average monthly income, and job occupation.