Featured Research

from universities, journals, and other organizations

Are consumers with fewer friends more likely to take financial risks?

Date:
January 15, 2013
Source:
Journal of Consumer Research, Inc.
Summary:
Feeling socially isolated causes consumers to pursue riskier but potentially more profitable financial opportunities, according to a new study.

Feeling socially isolated causes consumers to pursue riskier but potentially more profitable financial opportunities, according to a new study in the Journal of Consumer Research.

"Seeking social acceptance and maintaining close relationships are among the most fundamental and universal human needs. Consumers are often willing to invest or sacrifice important resources to secure social bonds. In the absence of social support, consumers seek significantly more money to secure what they want out of the social system surrounding them. Feeling socially rejected triggers riskier financial decision-making," write authors Rod Duclos (Hong Kong University of Science and Technology), Echo Wen Wan (University of Hong Kong), and Yuwei Jiang (Hong Kong Polytechnic University).

Feeling alone or rejected is a common experience. Romantic relationships end, people are ignored at parties or in office conversations, and offers of friendship are frequently rebuffed. In the absence of social support, do consumers seek and value money as an alternative means to get what they want out of the social system? And does this lead to greater financial risk-taking?

In one study, consumers were asked to recall a social situation that left them feeling either included or excluded. They were then asked to choose between a set of high-odds/low-reward and low-odds/high-reward gambling options. Feeling rejected fostered riskier decisions. However, this effect was mediated by the perceived instrumentality of money. That is, in the absence of social support, excluded consumers started to seek and value money as an alternative means to secure what they want out of the social system.

"Given the necessity of balancing between risk and financial reward in many important financial decisions (saving for college or retirement, deciding how to pay for health care and insurance, investing in the stock market), understanding how consumers trade risk for reward could help them make more informed decisions. For example, consumers might choose to delay important financial decisions following a breakup or a falling out with friends, colleagues, or family," the authors conclude.


Story Source:

The above story is based on materials provided by Journal of Consumer Research, Inc.. Note: Materials may be edited for content and length.


Journal Reference:

  1. Rod Duclos, Echo Wen Wan, Yuwei Jiang. Show Me the Honey! Effects of Social Exclusion on Financial Risk-Taking. Journal of Consumer Research, 2012; 000 DOI: 10.1086/668900

Cite This Page:

Journal of Consumer Research, Inc.. "Are consumers with fewer friends more likely to take financial risks?." ScienceDaily. ScienceDaily, 15 January 2013. <www.sciencedaily.com/releases/2013/01/130115143820.htm>.
Journal of Consumer Research, Inc.. (2013, January 15). Are consumers with fewer friends more likely to take financial risks?. ScienceDaily. Retrieved August 31, 2014 from www.sciencedaily.com/releases/2013/01/130115143820.htm
Journal of Consumer Research, Inc.. "Are consumers with fewer friends more likely to take financial risks?." ScienceDaily. www.sciencedaily.com/releases/2013/01/130115143820.htm (accessed August 31, 2014).

Share This




More Mind & Brain News

Sunday, August 31, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Young Entrepreneurs Get $100,000, If They Quit School

Young Entrepreneurs Get $100,000, If They Quit School

AFP (Aug. 29, 2014) Twenty college-age students are getting 100,000 dollars from a Silicon Valley leader and a chance to live in San Francisco in order to work on the start-up project of their dreams, but they have to quit school first. Duration: 02:20 Video provided by AFP
Powered by NewsLook.com
Baby Babbling Might Lead To Faster Language Development

Baby Babbling Might Lead To Faster Language Development

Newsy (Aug. 29, 2014) A new study suggests babies develop language skills more quickly if their parents imitate the babies' sounds and expressions and talk to them often. Video provided by Newsy
Powered by NewsLook.com
Electrical Stimulation Boosts Brain Function, Study Says

Electrical Stimulation Boosts Brain Function, Study Says

Newsy (Aug. 29, 2014) Researchers found an improvement in memory and learning function in subjects who received electric pulses to their brains. Video provided by Newsy
Powered by NewsLook.com
Treadmill 'trips' May Reduce Falls for Elderly

Treadmill 'trips' May Reduce Falls for Elderly

AP (Aug. 28, 2014) Scientists are tripping the elderly on purpose in a Chicago lab in an effort to better prevent seniors from falling and injuring themselves in real life. (Aug.28) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins