In 2009, marketing professors Priya Raghubir and Joydeep Srivastava gave $1 to each of 89 undergraduates and told them they could keep the money or spend it on candy. The students received the money in different denominations — 43 students were given four quarters, and 46 were given a dollar bill. About 63 percent of the students who’d received quarters chose to buy candy, but only 26 percent of those who’d received a dollar bill did so.

In related studies, Raghubir and Srivastava found that subjects who foresaw a need to exert self-control in spending chose to receive money in large denominations. And “[t]ightwads choose to receive money in a large denomination as a precommitment device when the need for self-control is high.”

The lesson seems to be that people are less likely to spend money when they receive it in large denominations. “[L]arge denominations are psychologically less fungible than smaller ones, allowing them to be used as a strategic device to control and regulate spending.”

(Priya Raghubir and Joydeep Srivastava. “The Denomination Effect,” Journal of Consumer Research 36:4 [December 2009], 701-713.)