Europoly Money: How Do Tourists Convert Foreign Currencies to Make Spending Decisions?

This paper examines how tourists convert foreign currencies to make spending decisions. Six studies demonstrate how sequential (Study 1) and simultaneous (Study 2) exposure to nominally different (but economically identical) prices, and the manner in which tourists perform currency conversions (Studies 3–5) influence price perceptions and purchase intentions. Study 6 shows the effects using macroeconomic spending behavior from 1993 to 2008 spanning the introduction of the Euro. The general discussion concludes with a model of how numerical inputs are combined to make judgments as a function of the number of inputs available and their ease of use.

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► We examine how tourists convert foreign currencies to make spending decisions.
► Exposure to nominally different identical prices affects price perceptions.
► Exchange rates also affect rounding strategies used to convert foreign currencies.
► Intentions vary depending on the rounding strategy and if US$ prices are provided.
► These effects play out in an analysis of macroeconomic tourist spending: 1993–2008.