My research focuses on how counterfactual emotions, anticipated or experienced, influence and bias behavioral choices. My research on information search identifies reasons that motivate people to search for useless information (e.g., why consumers compare prices of products purchased a while ago). My research about the psychological principles underpinning consumers’ economic behaviors, examines the repercussions of inserting an economic transaction mindset into a social relationship (i.e., mixing money and friendship). Finally, I seek to unravel the link between self-deception proclivities and consumers’ choices and explain how consumers justify the purchase of products they do not really need.
Emotions, counterfactual thinking, and post-decision information search
It is reasonable to argue that people search for information and develop knowledge that can help them to improve their decisions or judgments. I have observed two contradictory phenomena: On the one hand, people often expose themselves to painful information, even when it is of no use to their future goals. For instance, suspecting they have missed receiving a large discount, or believing they were ripped off, consumers may compare prices of products purchased a while ago. On the other hand, people often tend to avoid negative information that could be crucial to their personal or professional lives (e.g., avoiding or postponing a visit to a physician, or disregarding customer feedback on service).
Our research on information search and regret regulation identifies various reasons that motivate people to search for or to avoid information. Theoretical arguments and empirical analysis, experimental design conducted in the lab as well in the field, help to explain why individuals are willing to (counter-intuitively) search for painful information particularly when they are likely to find it; why they would rather temporarily avoid and disregard important information that may actually be beneficial to them; and under which conditions they are more capable of evaluating the importance and the relevance of the information to their future goals.
Our research helps to elucidate when people will search for and when they will avoid information, why they will yield to curiosity yet advise others to resist this temptation, why they prefer options associated with past promotions, and experience more regret and feel more responsible for missing a future promotion and in general how the experience of regret drives this behavior. Thus, it bears significant theoretical implications for understanding consumer choices and behavior. Nowadays, the opportunities for consumers to access and obtain information are abundant. We can easily log onto the internet and make investment decisions, or we can effortlessly find out if our decision not to invest in a specific stock was in fact a big mistake. Knowing that we have missed an appealing opportunity can be unpleasant and is likely to trigger negative feelings that may influence our choices and behavior, with implications for product and service organizations (e.g., people are likely switch brands in an attempt to disassociate current opportunities from those already missed).
Integrating psychological principles within the economic world
Sayings are usually based on broad collective wisdom amassed over time. The saying “Don’t do business with friends” suggests people draw a fine line between economic and social transactions. Indeed, both research and reflection suggest that these two types of transactions differ at their cores. Economic transactions tend to have a linear relation between effort and utility, that is, the harder I work, the more I expect to earn; the more I pay, the more I expect to get. In contrast, social transactions are not bound by this linear relationship. For example, we may help a friend move her belongings to a new apartment without any expectation of monetary compensation.
In a second line of research, we examine the repercussions of inserting an economic transaction mindset into a social relationship, across a variety of consumption phenomena and daily decisions. In some projects we explore the psychological outcomes of giving a substantial amount of money as a gift in the context of an ongoing social relationship (e.g., weddings). In another, we test the ecological validity of the association between consumption amount and payment method (e.g., (individual payment vs. even payment). Another related line of research dealing with money fleshes out the role of our expectations in monetary interactions with friends. In this research, we examine how friendship influences memory of actions in bargaining interactions. In this project, we let dyads consisting of either friends or of strangers play a competitive card game or the ultimatum game and then recalled the interaction. We found that participants generally remembered friends’ play as more competitive and less generous than strangers’ play, even when the actual play of the friends was more generous than that of the strangers. Friendship did not affect recall of the individual’s own play. The findings are consistent with a negative disconfirmation account whereby people expect their friends to be less competitive and more generous, and when these expectations are violated, people remember friends’ actions more negatively than they actually were.
Another extension of the research about the integration of psychological principles within the economic world aims to explain why some loans are not returned. We demonstrate that in the case of a small informal loan between friends, depending on the role played (borrower vs. lender), individuals operate under different mindsets (communal vs. exchange), which consequently leads to different repayment expectations. These findings explain why many small informal loans remain unpaid. In this line of research we show that borrowers think they should pay back monies that lenders do not even expect them to pay back; that this effect is more likely to manifest itself when small rather than large amounts of money are involved; and the mediating and moderating role of a communal (vs. exchange) perception of the loaning situation.
Justifications and sense making
People deceive themselves either for practical reasons such as extending their influence over others, or for sensible reasons such as the desire to view oneself in a favorable light. Past research has mainly considered cognitive alterations of individuals deceiving themselves, such as a selective memory search, rationalization of opposing arguments, and distorted self-signaling. In our research, we identify a new mechanism: “accidentally” eliminating the interpretation that poses a threat to positive self-perception. We suggest that when individuals are motivated to act in a way that does not resonate with their self-perception (i.e., avoid the appearance of being wasteful as consumers, or unethical as business partners), and when they are unable to justify their wasteful or otherwise inappropriate behavior, they are likely to adopt a careless behavior that may change the circumstances and “remove” the negative interpretation of the desired action.
In one of our projects for example, we demonstrate how individuals tend to behave more recklessly with their belongings if an opportunity to purchase a better product arises. The data we collected within the lab is consistent with “big” data we received from a large ecommerce company. It implies that consumers may “accidently” endanger a product they own when a new version of the product is introduced, to justify the purchase of the new product. Specifically, when new products are being offered on the market (offering a new design rather than advanced technology), there is an increase in the number of damaged items (e.g., iPhones) that are being offered for sale via the company channels.
We use experimental data to support our reasoning that justification concerns are the source of the phenomenon. Focusing on the iPhone as a case study, field data and experiments provide evidence of product endangering, and they support the role of justification in three ways. First, endangering occurs when the new product offers an improved design but does not offer a significant technological improvement. Second, owners are less likely to endanger a product that is under warranty, when damage to it will not enable upgrading. Third, owners are more likely to endanger their product when their justification concerns are heightened.