The psychology behind “Buy, Buy”: Why is it so nice to spend money?

Beijing time on May 13, according tomedia reports, if you do not have unlimited money supply, and most people, your money is limited, you carefully keep them, carefully plan every expense, however, you must have had this feeling, when you “buy and buy” can not stop, will spend a lot of money on things that do not need, it will make you feel very happy, at least at the moment of spending money is so, you think this is why? Let’s hear what the experts have to say.

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Scott Rick, Assistant Professor of Marketing, University of Michigan, USA

When thinking about the pleasures of consumption, you can start in several ways. In the literature of psychological accounting (also known as psychological accounts), we often talk about “getting utility” (when a product is priced below its value to us) and “trading utility” (the experience when the product is priced below our expectations), both of which are everyday sources of happiness, even when the buying behavior is manifestly irrational. For example, I might be happy to buy something because it’s on sale, even if the price still exceeds its value to me. In other words, the utility of a transaction goes beyond its due importance.

The fun of spending is partly driven by the wrong information, such as advertising, advertising, or packaging to make a product look better than it actually does. But even with plenty of information, people can make emotional predictions that today’s new- and cool-looking products will stay that way for a long time. We often don’t realize that the excitement of a new product actually fades quickly.

I’ve also done some research on the effectiveness of “shopping therapy”. We found that choosing what we wanted to buy can help restore a sense of personal control over life. It also helps to reduce negative emotions, such as sadness or anxiety, which are often associated with a sense of control given to people by the environment, external forces, such as natural disasters or epidemics. We found that shopping doesn’t really help eliminate negative emotions like anger because it’s about other people, such as bosses, exerting too much control over our lives.

Uma M. R. Kamakar (Uma R. Karmarkar, Assistant Professor of Management and Global Policy and Strategy, University of California, San Diego, focuses on theoretical-driven framework development related to consumer behavior

While people are generally more familiar with the “pain of payment”, spending money can feel good for a number of reasons. An easy example to think of is how consumption can be used as a means of achieving a goal or fulfilling a wish, such as buying a car that you want to save for all you want. You have decided that when you reach your goal, you will spend the money. Therefore, in the process of buying, the feeling of losing money is less obvious, but more of a feeling of excitement. This is related to the concept of “psychological accounting” in the field of behavioral economics, that is, people can give different meaningors or values to their psychologically divided into different categories of money. So spending “new car money” can be exciting, and spending “rental money” may not be that interesting, even if you withdraw money from the same checking account.

Those who buy bargains seriously may also be familiar with the economics of “trading utility”, which we can think of as the value of a deal. When we buy things at lower-than-expected prices, it usually feels good to spend money.

This process also makes us feel good when we believe that spending money can send a positive social signal for us. Buying an expensive bottle of wine or an upscale brand of goods may make people realize that we have the power to buy. In this kind of ostentatious consumption, the purpose of spending money is to show others that we are rich. But if you’re worried that it’s going to make people sound too self-centered, we’ll feel good about spending money on others. Research on altruism calls this the “light-heat effect”, a positive feeling that comes from the feeling of doing good things, such as giving to charities.

All of this highlights the interesting fact that money has many different meanings, depending on how, when and why we spend it.

Catherine Franssen, Assistant Professor of Psychology, Longwood University, USA

Our brain’s motivations and reward centers, such as the covered area of the inner ventricer, are closely linked. When we want something, these brain regions become very active and secrete dopamine, leading to a “must get it” feeling. To solve this “itching” problem, we need to seek satisfaction (partly regulated by nearby brain regions and the neurotransmitter serotonin). These motivational and reward centers in the brain are also linked to our memory bank, reminding us that buying things triggers satisfaction and makes us feel good. So whatever the reason for wanting to spend money (perhaps anxiety, sadness, or fear of missing the latest iPhone), the brain reminds us that buying something makes us feel better. From here we can see an unstable trend – we start spending money whenever there is pressure, which is a strategy with obvious long-term financial risks.

Spending money can also make people feel bad, and it can trigger a painful response to the brain. When we use cash and receive cash payments, we feel this painful reaction more strongly. It’s like the brain records how much we’ve put into something. Direct deposits and credit cards trick the system so that we don’t feel pain and can focus on the fun of getting new things.

Syon Bhanot, Assistant Professor of Economics, Swarthmore College, USA

“Emotional fix” plays a role in driving people to enjoy spending money. What I want to say is that a lot of things in our lives are uncertain and fragile, but the experience of buying something includes specific decisions and real transfers of property rights. That is, when you “buy and buy”, you must be “doing” something, you have absolute control over an item, which is a way to enhance emotions, because it creates a sense of individual independence and fosters a sense of freedom to choose the way to live. Maybe it’s a little too philosophical, but I think it does work!

Another view of behavioral economics is the “present bias”, the desire for instant gratification. Shopping means you can get something now, and in the world of credit card debt, shopping usually means not having to pay for a long time. So, in a sense, we’re inherently prone to overspending in the short term and heavily indebted, which is happening to many people around you.

Camelia Kuhnen, Professor of Finance, University of North Carolina at Chapel Hill, Expert in Neuroeconomics, Behavioral Finance, and Corporate Finance

What I’m trying to say is that in most cases, it’s not the “spend money” part that feels good. Instead, it’s the things you get with the money that makes you feel good. For most people, it’s better if you can’t afford it, but you can get it anyway. These items are the rewardyou you want. Once you get what you want, your brain’s reward area will show an increase in neuronal discharge and dopamine release. As a result, you will feel more excited and happier in a short period of time.

Sometimes, even if you don’t get something, spending money will make you happy. For example, you can be happy in the process of donating to charity. Your reward is not physical, but the “light heat effect” of helping others. This is known as “pro-social preference”.

One thing to keep in mind is that being rewarded by spending money on the moment may affect people’s understanding of what will happen in the future. If you spend too much now and can’t spend a few months, you may face financial difficulties and can’t pay your bills. Many people have a “right now”, that is, they value the immediate return, rather than a little later return. This current bias may pose future financial difficulties for these people.

Catherine Fox-Glassman, lecturer in psychology and undergraduate research director at Columbia University, focuses on the interaction symblebetweening of risk perception, decision-making and memory

I have a more specific question to answer: Why do we spend money when we’re not happy?

In a way, spending money makes us feel good, which is a bit surprising, because decades of research has shown (most) that humans hate loss. Half a century ago, Ian Fleming, an English writer and author of the James Bond series, noticed this trend. In The Story of Moonraker, he asked James Bond to observe casino games, “the winner’s return is always in some strange way less than the loser’s loss.” Decades later, the data illustrate this: on average, losses affect our decisions twice as much as our returns.

The aversion to loss leads to something called a “gift effect”: once we have something that no one else has, our asking price becomes higher when others are willing to bid for something like this. On average, the ratio of the price the “owner” is willing to sell to the price the “buyer” is willing to pay is about 2:1.” Our aversion to loss gives more value to the item.

However, the researchers found that there was a very simple way for “owners” and “buyers” to give an item the same value: to make them sad. A very clever study was carried out in 2004. The researchers used highlighters to conduct classic endowment-effect experiments and found that those who received highlighters were valued higher than those who did not. But another group of participants first watched a very sad short film. Although the short film had nothing to do with the highlighter’s valuation task, the sad participants’ estimate sparing of the highlighter was very different from that of their control group: the grieving “owner” demanded that the prize be forgiven at a fairly low price, while the grieving “buyer” was willing to pay a higher price than the control group. In fact, there is no statistical difference in the price of items between the two groups that watched the sad film – sadness completely eliminates the endowment effect!

Why does participating in a pricing assignment affect your valuation of an item when you are already feeling sad? This has to do with the fact that sadness is closely related to a sense of helplessness. Previous studies have shown that when we feel sad, we often feel at the mercy of our surroundings. This means that in order to get out of the state of grief, we have the motivation to control our situation. So when you’re a sad fluorescent owner, you’re willing to give them up cheaply because it’s a simple way to change the situation. When you’re a sad person without a fluorescent lamp, one way to change the situation might be to get a new highlighter, which is how much it costs.

In short, “shopping therapy” provides empirical support for the traditional view of a natural response to sadness (although the study doesn’t show whether people feel better after buying highlighters – just that this feeling of sadness makes them more likely to spend money). So part of the answer to this article’s question is that it feels good to spend money, because (we think) it makes us change in the world and may make us feel more in control.

Kathleen Vohs, Professor of Marketing, University of Minnesota, Professor of Excellence, McKnight

It feels good to spend money, because spending money is a modern form of trade, and human trade can be traced back to our earliest ancestors. In fact, anthropologists believe that one of the reasons why we humans live longer than Neanderthals is that we discover trade and participate in a wide range of ways, and Neanderthals showed little sign of trade. Trade enables people to access more resources, learn from innovation, and improve overall health and well-being. This is the source of one of our human nicknames, the rational broker. Trade allows us to reproduce and survive. Our use of money is a modern realization of our desire to trade; it feels good to spend money because it is a social way that has been integrated into the success of our species.

Monica Capra (C. Monica Capra, Professor of Economics, Claremont Graduate University, USA

In general, it is consumption, not money, that creates utility or value. We give food, shelter, education, health, recreation and status values. Spending money means we can consume what we need and like, which makes us feel a sense of satisfaction.

Behavioral economists believe that human psychology and culture play a role in determining how we view spending money. This explains why some people borrow more money to spend, while others hold it in their hands, even if they can only hide it under a mattress. However, regardless of attitude, spending does feel better when interest rates are low and central banks use interest rates as policy tools to influence consumption.

Many people like to spend their own money for the benefit of others, such as donating to charity. Cash donations to others are sometimes made out of altruism; in other words, people benefit from the ability to make others feel good. Sometimes people donate to show themselves that they are good people. Economists call the latter motivation a “light-heat effect”.

At the basic level, however, one might ask: Why does evolution make people like to spend money or something, rather than successful offspring? Economists who study evolution argue that it is impossible for humans to accurately understand the cause and effect of the world and the structure of statistics. For example, we do not know the exact probability of obtaining a successful offspring from sexual behavior, and humans cannot sample enough descendants to understand these probabilities. To make up for the lack of full understanding of the world, evolution gives us a utility function based on consumption (i.e., satisfaction from spending). This will provide a goal for our behavior and a learning mechanism to help us pursue this goal.