Track 1: Spending Money
Eesha Sharma (San Diego State University)

1D. Financial Decision Making

Friday, March 4
4:30pm – 6:00pm EST
Discussant: Eesha Sharma (San Diego State University)
MC: Jenny Olson (Indiana University)
Calendar Invite: Add to calendar
Student Coordinator: Elina Hur (Cornell University) (

Competitive Papers

Consumer Budget Management in the Age of Information Access
Authors: Liang Huang (Tsinghua University), Anastasiya Pocheptsova Ghosh (University of Arizona)
Presenting Author: Liang Huang (Tsinghua University)
Using data from several lab experiments, a field study, and a budget tracking application, we demonstrate that access to past spending information increases consumer spending within the budgeted amount. This happens because access to spending information enhances consumers’ certainty in budget standing relative to the budgeted amount. This effect is dynamic, with spending information affecting certainty at the end (but not the beginning) of the budget period. We demonstrate two interventions (providing less precise spending information and rolling over available money in the budget to the next period) that attenuate the effect.
The Friday Payday Effect: The Impact of Intraweek Payday Timing on Spending
Authors: Wendy De La Rosa (University of Pennsylvania), Broderick Turner (Virginia Tech), Jennifer Aaker (Stanford University), Prashant Mishra (Indian Institute of Management Calcutta)
Presenting Author: Wendy De La Rosa (University of Pennsylvania)
More than half of Americans are paid on Fridays. However, surprisingly little is known about how intraweek payday timing (i.e., the day of the week in which a consumer receives their paycheck) impacts consumer spending. The current work addresses this gap by demonstrating that getting paid on Friday (versus any other weekday) increases consumer spending throughout a period. A Friday payday serves as a unique temporal landmark, increasing consumers’ deserving justifications and their spending. Evidence for this account is shown through a series of pre-registered laboratory studies as well as a large-scale field experiment with Indian laborers.
Spending and Happiness: The Role of Perceived Financial Constraints
Authors: Rodrigo Dias (Duke University), Eesha Sharma (San Diego State University), Gavan J. Fitzsimons (Duke University)
Presenting Author: Rodrigo Dias (Duke University)
Prior research suggests that financial constraints increase compensatory consumption; yet, little is known about their effect on purchase happiness. We find that perceived financial constraints decrease purchase happiness. This effect occurs because consumers who perceive greater financial constraints are more likely to spontaneously consider opportunity costs when evaluating their purchases. Consistent with this mechanism, this effect is attenuated for planned (vs. unplanned) purchases. Finally, we find that because perceived financial constraints cause people to derive less happiness from spending, consumers who feel financially constrained write more negative reviews for their purchases.
Rating Service Professionals First Reduces Tip Amount in Sequential Decisions
Authors: Jinjie Chen (City University of Hong Kong), Alison Xu (University of Minnesota), Maria Rodas (University of Illinois), Xuefeng Liu (University of Minnesota)
Presenting Author: Jinjie Chen (City University of Hong Kong)
We demonstrate that rating a service professional first reduces the subsequent tip amount. However, tipping first does not affect subsequent ratings. We suggest that rating a service professional can be perceived as a reward and, therefore, justifies tipping a smaller amount. Process evidence suggests that the core effect is driven by, in part, pain of payment and mental accounting. These findings contribute to several theoretical fronts, including mental accounting, sequential decision making, and service marketing. Practically, we recommend that managers solicit tips before ratings when designing a decision architecture for customers.

Flash Talks

Weighing Anchor on Credit Card Debt
Authors: Benedict Guttman-Kenney (The University of Chicago Booth School of Business), Neil Stewart (Warwick Business School, University of Warwick), Jesse Leary (Financial Conduct Authority), Paul Adams (Unaffiliated)
Presenting Author: Benedict Guttman-Kenney (The University of Chicago Booth School of Business)
We conduct a lab-in-the-field experiment on UK credit cardholders testing a policy designed to remove the anchoring effect of credit card minimum payments. Across two balance scenarios, the policy effectively eliminates payments at only the minimum due, increases payments of the full balance, increases average payments by 44 percent, and changes the distribution of repayments. The experiment's external validity is evaluated by linking the experiment's hypothetical repayment choices with administrative data recording cardholders' actual, historical repayment choices. This reveals hypothetical choices are closely related to cardholders' actual payments.
Spending Responses to Income vs. Balance Information
Authors: David Dolifka (UCLA Anderson School of Management), Stephen A. Spiller (University of California Los Angeles), Stephanie Smith (UCLA Anderson School of Management)
Presenting Author: David Dolifka (UCLA Anderson School of Management)
Consumers dislike debt and use various strategies to avoid it. We consider one such strategy: spending less than a salient financial reference point. Building upon research on debt aversion and accumulation (stock-flow reasoning), we predict debt avoidance by spending less than whatever financial information is available. When applied to different types of information—such as income (flow) or balance (stock)—this strategy yields different accumulation trajectories. Results from an incentivized spending game indicate consumers apply the “underspending rule” to both income and balance. Consequently, participants who attend to income repeatedly underspend their income, resulting in an unintentional accumulation of balance.


The Effect of Money Priming on Variety Seeking- Activating the Concept of Money Increases Variety Seeking
Authors: Mehdi Hossain (University of Rhode Island), Ashok Lalwani (Kelley School of Business, Indiana University), Priscilla Peña (University of Rhode Island)
Presenting Author: Priscilla Peña (University of Rhode Island)
Through the course of 9 studies, the authors’ findings suggest that money related thoughts, when stimulated, strengthen one’s long-term orientation (LTO) thus enhancing consumers’ variety seeking purchases. While prior research of money’s influence on self-sufficiency exhibits the “evil” influence of money (e.g., selfishness), the authors propose, however that money related thoughts can trigger positive psychological changes that are conducive to LTO. Since LTO increases thought of the near and far future, consumers may conceptualize repeated consumption as become boring, thus seeking variety to avoid it. Simply put, long-term oriented individuals can better anticipate such satiation compared to short-term orientated individuals.
Breaking the Money Taboo: How Talking about Money Reduces Financial Anxiety
Authors: Matt Meister (University of Colorado Boulder), Joe J. Gladstone (University of Colorado Boulder)
Presenting Author: Matt Meister (University of Colorado Boulder)
The authors consider how talking about one’s money issues reduces the stress and anxiety felt towards those issues. The investigation uses multiple secondary data sources, including 360,398 posts scraped from an online forum and 101,844 survey responses. In addition, a longitudinal diary study experimentally tests the benefits of talking. We find that talking about money is beneficial in that it reduces feelings of stress and anxiety towards one's own finances. Additional analyses suggest that this benefit may be stronger for those who face objective financial distressed.
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