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The Value of Money.
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Academic Journal
By: Spiller, Stephen A. Advances in Consumer Research. 2011, Vol. 39, p XXXXXXXXXX4p.
Subjects: Consumer research; Labor incentives; Money; Consumer behavio
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The Value of Money Session Chair: Stephen A. Spiller, UCLA, USA
Paper #1: “I’ll Have One of Each”: How Separating Rewards into (Meaningless) Categories Increases Motivation Scott Wiltermuth, University of Southern California, USA Francesca Gino, Harvard Business School, USA Paper #2: I
elevant Outside Options Influence the Value of Money Stephen Spiller, UCLA, USA Dan Ariely, Duke University, USA Paper #3: Money Makes Money More Important Sanford DeVoe, University of Toronto, Canada Jeffrey Pfeffer, Stanford University, USA Byron Lee, University of Toronto, Canada Paper #4: Nostalgia Weakens the Desire for Money Jannine Lasaleta, University of Minnesota, USA Kathleen Vohs, University of Minnesota, USA Constantine Sedikides, University of Southampton, UK SESSION OVERVIEW Money is a remarkable technology fulfilling three primary functions: a medium of exchange, a unit of account, and a store of value. It is an integral part of most consumer interactions and pervades every aspect of our consumer lives. Other media of exchange, such as gift cards and reward points, fulfill similar functions and are nearly as ubiquitous. The value we place on money determines the extent to which we strive to accumulate it and our reluctance to part with it when making purchases. Normatively, money’s value is determined by the utility gained by using the marginal dollar. In this session, we consider a variety of important non-normative influences on the perceived value of money and media of exchange. In doing so, we help to answer how money is psychologically imbued with value. First, Wiltermuth and Gino show that organizing incentives such as time and money into categories increases motivation to work for those incentives. Such categories may be a
itrary, and the effect is robust to gain and loss frames; merely separating them into categories increases their value. Second, Spiller and Ariely examine how the set of possible purchases influences the value of a resource. Normatively, only the best use of a resource should affect its value. Instead, other possible but i
elevant uses affect the value placed on a resource as well. Third, DeVoe, Pfeffer, and Lee find that the accumulation of money increases the importance individuals place on money. By earning money through labor, the symbolic value of money is associated with one’s self-esteem and sense of competence, thereby increasing its importance. Finally, Vohs, Lasaleta, and Sedikides show that feelings of nostalgia weaken the desire for money. Nostalgia provides a sense of social support, weakening the reliance on money to provide such support in its place, and thus decreasing its value. Each paper advances our understanding of a truly fundamental question in consumer behavior: how do consumers value money and other media of exchange? Overall, the session provides a coherent set of distinct drivers of money’s perceived value with a wide variety of implications for marketing and consumer behavior. These papers will likely appeal to researchers interested in a variety of fields including gift cards, incentives, labor, materialism, the social and cognitive roles of money, and retro
and appeals.
“I’ll Have One of Each”: How Separating Rewards into (Meaningless) Categories Increases Motivation ExTENDED ABSTRACT Researchers have long sought to understand how to foster motivation more effectively. Much of this research has highlighted rational mechanisms that increase or make salient the benefits the worker obtains by applying effort. For instance, Adam Grant’s (2007, 2008) work has shown that highlighting the pro-social impact of people’s work increases their motivation. Hackman and Oldham XXXXXXXXXXhave similarly shown that task identity, task significance, and positive feedback all influence motivation. In the present research, we propose that even factors that should not rationally affect motivation may do so. Specifically, we hypothesize that categorizing rewards can increase motivation, even when those categories are a
itrary. We put forth this hypothesis because we believe people clump rewards into categories and are more sensitive to increases in the number of categories of rewards than they are to increasing the magnitude of rewards within a category. Thus, our work draws inspiration from Thaler’s XXXXXXXXXXwork on mental accounting. We tested our hypothesis across three experiments. In Study 1, 157 undergraduate students (53% female; Mage = 21.0) at a large, private university on the West Coast first completed an anagram unscrambling task (Cameron and Miller, XXXXXXXXXXUnbeknownst to the participants, the third and ninth anagrams were nearly impossible to solve. In one condition, successfully unscrambling anagrams ostensibly earned participants $2 per anagram solved. In another condition, successfully unscrambling anagrams allowed them to skip four minutes of a boring task. In a third condition, successfully unscrambling anagrams earned participants $1 and allowed them to skip two minutes of the boring task. Thus, these participants earned half the money and saved half the time that did participants in each of the other two conditions. The dependent variable was the amount of time participants persisted in the task. As predicted, participants in the two categories of benefit condition persisted longer (M = 9.1 minutes, SD = 3.1) than did those in the monetary benefit (M = 7.0, SD = 2.6) or time benefit conditions (M = 6.9, SD = 3.7), ps < .05. Studies 2 and 3 examined the hypothesis that separating incentives into categories can increase motivation, even when those categories are meaningless. Across these studies, we instructed participants that they would be transcribing a number of sections of type-written text to help us to prepare for a future study, in which we would study how handwriting can affect the perceptions people have of others. We manipulated whether a collection of items purchased from a local dollar store were portrayed as belonging to a single category or to two categories. In the categorization condition, participants were told that Category 1 was in the Purple Storage Container and Category 2 was in the Clear Storage Container. These participants were told that they could take home one of the items from either category if they transcribed for ten minutes and that they could take home an item from the other category if they transcribed for twenty minutes. In the no-categorization condition, participants were told that they could take home one item if they transcribed for ten minutes and two items if they transcribed for twenty minutes. Participants were told that may spend as much time or as little time transcribing these sections as they liked. Participants were then told to take a look at the rewards that they could win. The rewards were not sorted into specific categories; rather, there was a mix of statio
268 / The Value of Money nery, hardware, and food items in each container. The likelihood of participants transcribing sections of text for a full twenty minutes served as the primary dependent variable. Study 2 participants in the categorization condition were more likely to transcribe for the full twenty minutes (34.4%) than were participants in the no-categorization condition (9.7%), p = .03. They also reported that they were more motivated to obtain the second reward (M = 4.22, SD = 2.21) than did participants in the no-categorization condition (M = 3.07, SD = 1.95), p = .03. Bootstrapping analysis revealed a significant indirect effect. Study 3 replicated the categorization effect using a loss frame. In this case, participants selected their prizes at the beginning and were asked to return one if they did not work twenty minutes and return two if they did not work for ten minutes. Motivation to obtain the second item again mediated the effect. We conclude from our results that that separating incentives into categories can increase motivation, even when the basis for the categorization is meaningless. I
elevant Outside Options Influence the Value of Money ExTENDED ABSTRACT How do consumers represent the value of money? We propose that holding constant the value of a resource’s best use, liking for the category of possible and accessible uses is an important (but normatively i
elevant) determinant of the perceived value of money. Economically, money is as valuable as the goods it buys. Understanding other non-normative influences on the value of money informs our understanding of consumers’ propensities to spend, save, and earn money. Because money is associated with a large, heterogeneous group of products, the associations between money and its best uses are weak (Weber and Johnson XXXXXXXXXXAs a result, other inputs associated with a resource that are not its best uses, and that are therefore i
elevant, may be likely to affect its perceived value as well. In four studies, we demonstrate that accessible but i
elevant items in the category of possible purchases affect how consumers value media of exchange. In Studies 1 and 2 we examine the perceived value of artificial media of exchange, and in Studies 3 and 4 we examine the perceived value of gift cards. Measured set composition. In Study 1, we ask: Do resource uses other than the most valuable use affect the value of the resource? Undergraduate students (total N=42; usable N=34) learned how each of several certificates could be used to purchase one product from associated subsets of 1, 2, or 3 products. For example, one certificate could be exchanged for one product from the set: notepad, packet of pens, roll of tape. Each certificate should be worth as much as its most valuable use. Participants reported how much they would be willing to pay for each certificate and then reported how much they would be willing to pay for each product. Regressing certificate willingness to pay (WTP) on (a) set size, (b) maximum product WTP across its subset of products, (c) average product WTP across its subset of products, and (d) certificate fixed effects revealed that participants were willing to pay more for certificates associated with larger sets (p<.0001), marginally more for certificates associated with sets with higher maximum product WTPs (p<.09), and more for certificates associated with sets with higher average product WTPs (p<.05). Holding constant the value of the most valuable product, other less valuable products affected certificate WTP. Manipulated set composition. In Study 2 (total N=83; usable N=71), we replicate Study 1 and manipulate the value of products. In addition to replicating Study 1’s results, we find that controlling
for maximum WTP and set size, manipulating a set of products to replace a high-valued product with a low-valued product decreases WTP (p< XXXXXXXXXXControlling for the value of the best use of a medium of exchange