The effect of currencies’ face value on consumer behavior, product valuation and willingness-to-pay

In this paper, the influence of the nominal value of a currency, also known as the face value, on one‟s willingness-to-pay is being examined. Two studies were conducted both in Israel and the Netherlands to detect patterns in consumer decision making considerations when attaching one‟s willingness-to-pay for a certain product. Additionally, the sources of these pricing mechanisms are presented. The studies show that as the currency in use is a multiple of another, people tend to underspend, while using this currency; On the other hand, consumers tend to overspend when the currency in use is a fraction of the other.