Source: William Brady & Jay Van Bavel—New York University
Psychologists have long known that people behave differently in good moods versus bad moods, and this general principle extends to consumer behavior. Economists, as well, have come to appreciate that an individual’s financial decisions are not solely the result of extensive cost-benefit calculations; other factors like emotion are at play. Further, incidental emotions affect the behavior of buyers and sellers even though they are unrelated to the transaction at hand. While earlier research focused on the impact of global feelings (positive-negative), more recent research examines more specific emotions (e.g., anger and fear). In consumer settings, research shows that anger triggers greater risk-seeking behavior among buyers and sellers and that fear triggers the opposite, i.e., conservative behavior.
The following experiment tests how two specific negative emotions—disgust and sadness—influence people’s financial valuation of objects.1 The experiment examines the relationships between induced emotional states (disgust and sadness) and the endowment effect. Inherent in this experiment is a common technique for inducing specific emotions in a laboratory setting. Once the emotions are created, they can then be implemented in a number of experimental conditions.
The endowment effect is the tendency for people to overvalue objects they own. As a seller, people demand higher prices for objects they own than they would be willing to pay themselves, as buyers.
Incidental emotions are feelings that a consumer or seller carries with them to a potential financial transaction but are not caused by the potential transaction. For example, a consumer may be contemplating the purchase of a new TV while feeling sadness over an earlier argument with their spouse.
1. Participant Recruitment
2. Data Collection
3. Data Analysis
The data (Figure 1) show support for the idea that compared to the neutral condition, sadness decreased the prices for those in the selling condition, but increased prices for those in the choice condition. However, compared to the neutral condition, disgust reduced prices for participants in both the selling and choice conditions.
Figure 1: Results showing average selling and choice prices for neutral participants, disgusted participants and sad participants. Price is on the y-axis and and experimental condition is on the x-axis.
Although they are both negative emotions, disgust and sadness trigger different economic behavior. Disgust triggers the psychological need to expel, thus reducing both buying and selling prices. Conversely, sadness triggers the psychological need to change one’s circumstances, thus increasing buying prices and decreasing selling prices. With disgust, the endowment effect is eliminated, whereas with sadness the effect is reversed.
Emotion and cognition influence one another. Our appraisals of situations can drive emotions, and our emotional states can influence the way we think. Moreover, decisions are rarely made in an emotional vacuum; often, people are experiencing strong emotions before, during, and after they make decisions. Even our calculations of economic value are influenced by our emotional states. For example, the sadness from going through a divorce could actually alter our consumer-spending.
This study has clear implications for advertising and marketing. These findings suggest that people are willing to spend more for an item when they are sad, which could be leveraged by producing sadness-inducing marketing and by pricing items higher in situations in which consumers are likely to be sad. People are less willing to spend money when disgusted, likely because they value objects less (perhaps due to a sense of contamination). Thus, marketers should avoid inducing disgust in consumers. This is an important insight, given that mild comic disgust is quite common in advertising. Conversely, someone seeking to buy something might want to make the seller feel disgust, as they may be willing to sell the item for a lower price.
Skip to...
Videos from this collection:
Now Playing
Social Psychology
15.6K Views
Social Psychology
41.9K Views
Social Psychology
11.4K Views
Social Psychology
8.5K Views
Social Psychology
21.0K Views
Social Psychology
17.3K Views
Social Psychology
16.7K Views
Social Psychology
6.3K Views
Social Psychology
10.6K Views
Social Psychology
25.7K Views
Social Psychology
25.6K Views
Social Psychology
52.4K Views
Social Psychology
7.9K Views
Social Psychology
6.5K Views
Social Psychology
11.0K Views
Copyright © 2025 MyJoVE Corporation. All rights reserved