Cryder, C.E., Lerner, J.S., Gross, J.J., & Dahl, R.E. (2008). Misery is not Miserly: Sad and Self - Focused Individuals Spend More. Psychological Science, 19, 6, 525 - 30.

Prelec, D., & Simester, D. (2001). Always Leave Home Without It. A Further Investigation of the Credit-Card Effect on Willingness to Pay. Marketing Letters, 12, 1, 5 - 12.

Kirsten Allanson, Lee Bishop, & Siôn Pickering

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Article paper - Want to spend less?... Research paper 1 - Misery is not Miserly…

Aims and Justifications Method and Results Discussion

Research paper 2 - Always Leave Home Without It… Aims and Justifications Method and Results of Study 1 Method and Results of Study 2 General Discussion

Conclusion

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Article from BPS research digest blog

Overview When handing over money, the insula becomes active.

Not so when paying with card because there is no physical loss

Individuals who feel sad spend more

http://bps-research-digest.blogspot.com/search?q=begley3

Publication◦Psychological Science

Author

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Cryder, C.E., Lerner, J.S., Gross, J.J., & Dahl, R.E. (2008). Misery is not miserly – sad and self-focused individuals spend more. Psychological Science, 19(6) 525-30.

Aims & justification

◦ 1– Is MINM moderated by self focus?

◦ 2 – is MINM mediated by self focus?

◦ 3 – Generalisability of MINM

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Method

◦ 33 participants, volunteer sample

◦ Independent design

◦ Randomly allocated into ‘sad condition’ and ‘neutral condition’.

◦ Self–focusing essay

◦ Buying task

◦ Manipulation check & debriefing

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Results

T-tests show that sad condition participants spent more than neutral condition participants.

There was a larger effect in high self-focus group against low self-focus group.

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Discussion

The MINM effect only occurs when self-focus is high

Relationship between sadness and spending mediated & moderated by self-focus

Other possible interpretations of the data: - mood repair - reduced self value

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Black, D.W., Repertinger, S., Gaffney, G.R. & Gabel, J. (1998). Family History and Psychiatric Comorbidity in Person with Compulsive Buying: Preliminary Findings. American Journal of Psychiatry, 155:960-963.

Capra, C.M., Lanier, K.F. & Meer, S. (2010). The effects of induced mood on bidding in random nth price auctions. Journal of Economic Behaviour & Organisation, 75:223-234

Publication◦Marketing Letters

Authors◦ Drazen Prelec◦ Duncan Simester

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Aims & Justification

◦ To see whether people were more willing to pay more when using a credit card (credit card premium).

◦ Investigate generalisability of Feinberg (1986)’s results.

◦ Investigate influence of knowing the market price and credit card stimuli.

Feinberg, R. A., (1986). Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation.Journal of Consumer Research ,12, 384 - 356.

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Specific Aim Investigate Willingness-to-Pay.

Methods A volunteer sample are randomly allocated to cash or card

condition Second-price sealed-bid auction for a selection of goods

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Results

The credit card condition wrote down significantly higher values for all three prizes than the cash condition.

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Buying Price

(£)

Prizes

Specific Aims Investigate necessary conditions to support credit card premiums. Investigate whether consumers adjusting valuations from

anchoring points is a valid explanation.

Method Participants selected by an opportunity sample where randomly

assigned to one of four groups, credit card / cash condition and letters & digits / type of card

Invited to buy a dinner certificate Becker De-Groot ‘incentive –compatible’ procedure

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Results

Conflicting findings with study one.

Willingness to pay higher in congruent conditions than in incongruent conditions.

Main effects of payment method and identification method not significant.

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Buying Price

(£)

Identification Method

Non-exposure Exposure

General discussion

Authors suggest that there is no evidence that exposure to credit card logo increases willingness-to-pay

Authors suggest that congruence is more important

Authors suggest liquidity constraints (access to cash) does not explain the credit card premium.

Authors suggest that customers adjust their valuations from different anchoring points in the cash/credit card conditions.

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Relevance Has been looked at since 1970’s

Used real money transactions therefore more generalisable

High value goods as usually use credit card for this purpose

Current issue - economic crisis

Further Research Shimp and Moody (2000) Lie et al. (2010)

Lie, C., Hunt, M., Peters, H.L., Veliu, B., & Harper, D. (2010). The “Negative” Credit Card Effect: Cr edit Cards As Spending - Limiting Stimuli In New Zealand. The Psychological Record, 60, 399 – 412

Shimp, T. A., & Moody, M.P., (2000). In Search of a Theoretical Explanation for the Credit Card Effect. Journal of Business Research, 48, 17 – 23.

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Misery is not Miserly…Always Leave Home Without It…

Overall we consider this a good study with good relevance, but there was a methodological flaw with the self-focused essay.

Does have clinical implications which are useful for real world applications.

In our opinion this paper is overcomplicated and it contradicts itself between the first and second experiment.

However does introduce a new methodology and so does contribute to future research.

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Black, D.W., Repertinger, S., Gaffney, G.R. & Gabel, J. (1998). Family History and Psychiatric Comorbidity in Person with Compulsive Buying: Preliminary Findings. American Journal of Psychiatry, 155:960-963.

Becker, M. G., DeGroot M.H., & Marschak, J. (1964). Measuring Utility by a Single-response Sequential Method. Behavioural Science, 9, 226 - 232.

Capra, C.M., Lanier, K.F. & Meer, S. (2010). The effects of induced mood on bidding in random nth price auctions. Journal of Economic Behaviour & Organisation, 75:223-234

Clark, M.S., & Isen, A.M. (1982). Towards understanding the relationship between feeling states and social behavior. In A.H. Hastorf & A.M. Isen (Eds.), Cognitive social psychology .73 - 108. Amsterdam: Elsevier/North-Holland.

Cryder, C.E., Lerner, J.S., Gross, J.J., & Dahl, R.E. (2008). Misery is not miserly: sad and self-focused individuals spend more. Psychological Science, 19, 6, 525 - 30.

Feinberg, R. A., (1986). Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation. Journal ofConsumer Research ,12, 384 - 356.

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Garg, N., & Lerner, J. (2006). Emotion effects on compensatory consumption. Unpublished manuscript, The University of Mississippi, Oxford.

James, W. (1890). Principles of psychology. New York: Holt.

Lie, C., Hunt, M., Peters, H.L., Veliu, B., & Harper, D. (2010). The “Negative” Credit Card Effect: Credit Cards As Spending - Limiting Stimuli In New Zealand. The Psychological

Record, 60, 399 – 412.

Lynn, M. (2006b). Tipping in restaurants and around the globe: An interdisciplinary review. In M.Altman (Ed.), Handbook of contemporary behavioural economics: Foundations and developments, 626 - 643. Armonk, NY: M. E. Sharpe.

Prelec, D., & Simester, D. (2001). Always Leave Home Without It. A Further Investigation of the Credit-Card Effect on Willingness to Pay. Marketing Letters, 12, 1, 5 - 12.

Shimp, T. A., & Moody, M.P., (2000). In Search of a Theoretical Explanation for the Credit Card Effect. Journal of Business Research, 48, 17 – 23.

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