Neuroscience
As the recession bites, Newsweek magazine has a timely article on some of the brain processes underlying consumer decision making. The author Begley particularly emphasises research showing that people tend to be willing to spend more when they pay by credit card rather than cash:
Begley also highlights research by Cynthia Cryder and colleagues, showing that people are willing to pay more for products when they are feeling sad - perhaps because acquiring more stuff helps them feel better about themselves.
In short, it seems that if you want to reduce your spending this holiday season, you're best off carrying cash, not cards, and staying indoors if you're feeling blue.
Post written by Christian Jarrett (@psych_writer) for the BPS Research Digest.
Link to Newsweek article Inside the Shopping Brain by Sharon Begley.
Link to study showing people spend more when paying by credit card (pdf).
Link to study showing people spend more when miserable (pdf).
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Neuroscience
Want to spend less? Ditch your credit card and don't shop when sad
As the recession bites, Newsweek magazine has a timely article on some of the brain processes underlying consumer decision making. The author Begley particularly emphasises research showing that people tend to be willing to spend more when they pay by credit card rather than cash:"When you hand over a stack of 20s, you have less of something tangible: your billfold is lighter. That causes a brain region [the insula] that registers negative feelings (bad smells, unfairness, social ostracism) to become more active than when you charge a purchase. Humans have evolved to pay attention to the messages the insula sends, with the result that it hurts to pay cash. There is no such feeling of loss when you pay with plastic, so the insula doesn't react. Credit cards anesthetize the otherwise painful act of paying".Begley goes on to quote this study (pdf) by MIT researchers in which participants were willing to pay significantly more for football game tickets or a restaurant voucher when using a credit card compared with cash.
Begley also highlights research by Cynthia Cryder and colleagues, showing that people are willing to pay more for products when they are feeling sad - perhaps because acquiring more stuff helps them feel better about themselves.
In short, it seems that if you want to reduce your spending this holiday season, you're best off carrying cash, not cards, and staying indoors if you're feeling blue.
Post written by Christian Jarrett (@psych_writer) for the BPS Research Digest.
Link to Newsweek article Inside the Shopping Brain by Sharon Begley.
Link to study showing people spend more when paying by credit card (pdf).
Link to study showing people spend more when miserable (pdf).
- How A Psychological Bias Leads Many People To Pay More Credit Card Interest
New financial rules in the U.K. and elsewhere mean that credit card companies have to take a monthly minimum payment from card-holders who have an outstanding balance. It's a protective measure that's intended to stop card-holders' debt from...
- Ouch, That's Expensive!
As well as hurting your wallet, your brain expects an expensive product to cause you pain too. Researchers have found that in terms of brain activity, whether or not we choose to make a purchase is reflected in a trade-off between regions of the brain...
- Localising 'oops!' In The Brain
Researchers have identified the part of the brain that is activated when we make a costly mistake, and they think the same region may be implicated in conditions like obsessive compulsive disorder (OCD) that are associated with disproportionate anxiety...
- Critiquing Scientific Studies, For The Layperson
Great article in Newsweek about the potential pitfalls of using scientific research to make a point. Sharon Begley details some ways in which research methodology can skew study results. Study design, Begley argues, can lead to results which contradict...
- Messy Reptilian Brains
Sharon Begley uses her article April 9, 2007 article in Newsweek, In Our Messy Reptilian Brains to review a new book by Johns Hopkins professor of neuroscience David Linden The Accidental Mind. In it, Begley quotes Linden as saying that while the brain...