Speaking of Psychology
Encore - Tightwads and spendthrifts: How emotions drive our shopping behavior, with Scott Rick, PhD
Nov 27, 2024
Scott Rick, an associate professor at the University of Michigan's Ross School of Business, dives into the emotional forces that influence our shopping habits. He explores why some people effortlessly spend while others struggle, dissecting the concepts of tightwads and spendthrifts. Rick reveals how events like Black Friday play with our emotions and why 'retail therapy' might not be as effective as we think. He also touches on the development of spending behaviors in children and the tensions between financial personalities in relationships.
33:14
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Quick takeaways
- Emotions play a crucial role in shaping consumer behavior, differentiating between those who find spending pleasurable and those who feel anxiety about it.
- The allure of shopping events like Black Friday is driven by psychological tactics that minimize emotional discomfort and promote impulsive buying decisions.
Deep dives
The Psychology of Spending
Emotions significantly influence spending behaviors, revealing the complex nature of consumer decision-making. Research indicates a notable difference between 'tightwads,' who experience discomfort with spending, and 'spendthrifts,' who overspend without considering the consequences. The emotional experience known as the 'pain of paying' acts as a brake on spending, with tightwads often feeling anxiety before and during purchases. Understanding these differences can help develop strategies to manage spending habits effectively and improve overall financial well-being.
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