Cynthia Cryder

Misery Is Not Miserly Sad and Self-Focused Individuals Spend More

Misery is not miserly: Sadness increases the amount of money that decision makers give up to acquire a commodity. The present research investigated when and why the misery-is-not-miserly effect occurs. Drawing on William Jamess concept of the material self, we tested a model specifying relationships among sadness, self-focus, and the amount of money that decision makers spend. Consistent with our Jamesian hypothesis, results demonstrated that the misery-is-not-miserly effect occurs only when self-focus is high. That is, self-focus moderates the effect of sadness on spending. Moreover, mediational analyses revealed that, at sufficiently high levels, self-focus mediates (explains) the relationship between sadness and spending. Because the study used real commodities and real money, the results hold implications for everyday decisions, as well as implications for the development of theory. For example, economic theories of spending may benefit from incorporating psychological theories—specifically, theories of emotion and the self—into their models.

Winning the Battle But Losing the War: The Psychology of Debt Management

When consumers carry multiple debts, how do they decide which debt to repay first? Normatively, consumers should repay the debt with the highest interest rate most quickly. However, because people tend to break complicated tasks into more manageable parts, and because losses are most distressing when segregated, the authors hypothesize that people will pay off the smallest loan first to reduce the total number of outstanding loans and achieve a sense of tangible progress toward debt repayment. To experimentally examine how consumers manage multiple debts, the authors develop an incentive-compatible debt management game, in which participants are saddled with multiple debts and need to decide how to repay them over time. Consistent with the hypothesis, four experiments reveal evidence of debt account aversion: Participants consistently pay off small debts first, even though the larger debts have higher interest rates. The authors also find that restricting participants’ ability to completely pay off small debts, and focusing their attention on the amount of interest each debt has accumulated, helps them reduce overall debt more quickly.

Enduring Effects of Goal Achievement and Failure Within Customer Loyalty Programs: A Large-Scale Field Experiment

This research investigates whether there are enduring effects of goal achievement and failure within customer loyalty promotion programs. We collaborated with a major hotel chain to launch a large scale field experiment involving 95,532 existing loyalty customers. We observed customers’ hotel stays for eight months before the experiment, eight months during the experiment, and eight months after the experiment. Customers in the treatment group were asked to increase their hotel nights during the 8-month promotion by a set percentage relative to their baseline to receive a reward. Overall, the promotion led to increased purchasing in the post-promotion period. However, only 20% of customers successfully reached the goal whereas 80% missed the goal. We use a propensity score analysis to examine the distinct effects of goal achievement versus goal failure. Results show that goal attainment significantly increased post-promotion purchasing whereas goal failure significantly reduced post-promotion purchasing. Additionally, we use econometric methods to empirically test a behavioral theory of relationship-based reciprocity. We find that customers in a high status tier relationship, with the most invested in the firm, are most affected by goal failure whereas customers in a low status tier relationship, with the least invested in the firm, are most affected by goal success. Because the type of loyalty program described in this paper is widely used in a variety of industries the findings suggest that marketers should set reachable goals within loyalty promotion programs. Firms should be particularly cautious about the impact of goal failures for the firm’s most loyal customers.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0966 .

The Charity Beauty Premium: Satisfying Donors’ “Want” Versus “Should” Desires

Despite widespread conviction that neediness should be a top priority for charitable giving, this research documents a “charity beauty premium” in which donors often choose beautiful, but less needy, charity recipients instead. The authors propose that donors hold simultaneous yet incongruent preferences of wanting to support beautiful recipients (who tend to be judged as less needy), but believing they should support needy recipients. The authors also posit that preferences for beautiful recipients are most likely to emerge when decisions are intuitive, whereas preferences for needy recipients are most likely to emerge when decisions are deliberative. These propositions are tested in several ways. First, when a beautiful recipient is included in basic choice sets, this recipient becomes the most popular option and increases donor satisfaction. Second, heightening deliberation steers choices away from beautiful recipients and toward needier ones. Third, donors explicitly state that they “want” to give to beautiful recipients but “should” give to less beautiful, needier ones. Taken together, these findings reconcile and extend previous and sometimes conflicting results about beauty and generosity.