Concept · Cognitive Bias: Economic and consumer biases

Denomination effect

Origin: Raghubir & Srivastava, 2009

Biological Parallel

Animals treat small, divisible resources differently from large, intact ones. A lion defends a zebra carcass aggressively but ignores scattered scraps; the threshold for defense effort maps to item size. Similarly, crows cache whole nuts but immediately consume fragments. Large denominations trigger 'intact resource' psychology—heightened loss aversion and protection—while small denominations register as already-consumed residue, psychologically cheap to spend.