Every year about this time, on Black Friday, the day after Thanksgiving that traditionally begins the holiday shopping season, early-morning consumers stand in long lines eager to purchase some sought after prize. From the outside, it looks as if these holiday shoppers can’t wait to plunk down their cash, but University of Michigan Marketing Professor Scott Rick says consumers often behave differently than they would ideally like to behave.
“Some consumers chronically spend more than they would like, and some consumers chronically spend less than they would like,” he says. Where an individual falls within the range of desiring to spend more or less largely determines whether he or she is a tightwad or a spendthrift, characteristics that determine quite a bit about a person’s spending habits.
Rick says anticipating the psychological pain that goes along with paying money drives some people to spend less than they would like, while not experiencing enough pain causes others to spend more.
While a graduate student at Carnegie Mellon University, he and a group of colleagues developed and validated a “Spendthrift–Tightwad” scale to measure stable differences in the level of pain that come from spending decisions. He and his colleagues have since been able to observe the expected patterns of pain in the brains of tightwads and spendthrifts in fMRI experiments involving shopping tasks.
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