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Summary
The study found that consumers experiencing social exclusion are more likely to make high risk investments. This effect is moderated by consumers' level of mental budgeting such that at high levels of mental budgeting the effect of social exclusion on investment choice is attenuated. The study further finds that the moderating effect of mental budgeting is mediated by pain of payment.
The findings suggest that policymakers can reduce unduly risky personal investment behavior by triggering mental budgeting thoughts using methods such as advertising and mention of transaction fees.
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MORE IDEAS ON THIS
Pain Of Payment
- painful state of mind or psychological burden consumers experience upon purchase
- lowered by credit card and mobile payments
- bottom dollar effect: purchases using budgets close to exhaustion result in a lower customer satisfaction
- high...
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92 reads
Mental Accounting II
- prospect theory: loss perception decreased in consumers in a low state of mental budgeting
- psychological myopia: tendency to focus on immediately relevant information (e.g., transaction fees) while ignoring relevant background information stronger fo...
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95 reads
Mental Accounting
- incl. mental budgeting (separation of monetary income into economic categories), labelling of income and assets, hedonic framing (evaluation of gains and loss combinations)
- violates the fungibility assumption of money
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121 reads
Hypotheses
H1: Socially excluded people have a higher preference for high-risk investment products than socially included people.
H2: For individuals with higher mental budgeting, the positive effect of social exclusion on preference for high-risk investment products will be lower.
H3: The mod...
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87 reads
Social exclusion
- a state of physical/emotional isolation involving feelings of loneliness due to being left out, ignored or ostracised by others
- leads to anti-social behaviour
influences:
- preference for distinctive products: psychological emptiness/ unsatisfactory interpersonal...
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178 reads
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