Is ‘4 for $16’ Better Than ‘4 for $15.30’? The Price Divisibility Effect in Multipack Purchases

Abstract

Abstract While much is known about product bundles comprised of different items, much less is known about multipacks—a product set comprised of multiple identical items (e.g., a 4-pack of body washes). Using the context of multipacks, the authors propose a novel price divisibility effect, which suggests that, a multipack’s price that is easily divisible (vs. non-divisible) by the number of component items in the multipack will increase its purchase likelihood. For example, purchase likelihoods of a 4-pack body wash multipack will be higher when its price is $16 (easily divisible by 4) versus $15.30 (non-divisible by 4). This occurs because a divisible versus non-divisible price shifts consumers’ attention to the unit and creates a belief that each unit item in the multipack will be consumed quickly, which, in turn, helps justify purchasing multiple units. The authors report findings from 15 studies (including a field experiment), where they demonstrate the effect and its underlying mechanism and delineate several moderators and boundary conditions. This research contributes to several literature streams, including those on product bundling, multiple-unit pricing, product consumption, and numerical cognition.