Denomination Effect (Why do we prefer to spend the same amount of currency in larger denominations than smaller denominations?)
The Denomination Effect, a brief explanation
What is the Denomination Effect?
The denomination effect is the tendency to prefer spending currency in large denominations (e.g., a £50 note) compared to the same amount in smaller denominations (e.g., 5 £10 notes).
Examples
When shopping with cash you may prefer to pay for items with a larger value banknote than several small value banknotes.
The literature
Raghubir, P. & Srivastava, J. (2009). The denomination effect. Journal of Consumer Research, 36(4), 701-713. Doi: 10.1086/599222
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