When and how aesthetics influences financial decisions

Townsend, Claudia; Shu, Suzanne B.

doi:10.1016/j.jcps.2010.06.013

Cited by 77 publications

(60 citation statements)

References 21 publications

(20 reference statements)

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“…That is, when an investment's background-goal instrumentality is explicitly cued, individuals' extra willingness to trade off the normative goal of financial returns for a background goal is eliminated (compared to the situation when the background goal is subtly activated but not explicitly cued). This finding extends Townsend and Shu (2010), who show that when individuals are asked to explicitly reflect on the degree to which aesthetic (i.e., non-financial) factors influence their investment decisions, the influence of such aestheticallypleasing information diminishes. While the present backlash results are consistent with these prior findings, a different trigger of such "automatic correction" processes is identified in the present research: the feeling of being unexpectedly confronted with norm-violating (i.e.…”

Section: Contributions To Researchsupporting

confidence: 77%

“…First, they add to the nascent literature on how consumers make financial decisions (e.g., Goldstein et al, 2008;Lynch, 2011;Morrin et al, 2012;Raghubir & Das, 2010;Townsend & Shu, 2010) by showing how the different aspects of an individual's goal system affect his or her investment choices. In particular, the results extend emerging research that suggests that consumers may have non-financial investment motivations (Aspara & Tikkanen, 2010;Fama & French, 2007;Hoffmann & Broekhuizen, 2009;Statman, 2004;Townsend & Shu, 2010;Morse & Shive, 2011).…”

Section: Contributions To Researchmentioning

confidence: 99%

“…Research on consumer financial decision-making increasingly notes the importance of investigating consumers' investment choices, as these choices are risky, involve high stakes, and can have life-long consequences (Goldstein et al, 2008;Lynch, 2011;Morrin et al, 2012;Raghubir & Das, 2010;Townsend & Shu, 2010). The present research focuses on examining the interplay between the normative focal goal of maximizing risk-adjusted financial returns from financial products versus satisfying less normative background goals such as fulfilling a need for self-expression.…”

Section: Introductionmentioning

confidence: 99%

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Focal versus background goals in consumer financial decision-making

Aspara

Chakravarti

Hoffmann

2015

European Journal of Marketing

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Purpose – This study aims to examine the interplay between focal and background goals in consumer financial decision-making and identify conditions that lead individuals to trade-off financial returns for background goals. Design/methodology/approach – The current research reviews the relevant literature on consumer financial decision-making and goal systems theory to develop a set of hypotheses that is tested using three experiments. Findings – The experiments show that individuals who have been subtly primed with self-expressive background goals, or experienced progress toward the focal goal of financial returns, accept lower financial returns for the opportunity to invest in stocks that allow for increased self-expression. Further, while subtly primed background goals exert a non-normative influence on investment decisions, explicit cues about an investment’s background goal-instrumentality create a backlash effect, and decrease individuals’ willingness to trade-off financial returns. Research limitations/implications – Future research could confirm the robustness of the findings of the present research by using different priming tasks and alternative ways of making the background goal explicit to individuals. Practical implications – To achieve greater attraction among individual investors, it helps to frame a financial product or stock in communications materials in a way that sends subtle signals with which investors can identify. Such signals could include stressing the product/company’s home country (addressing individuals’ patriotism) or a particular product domain (addressing individual investors’ desire for interesting/exciting current/future products). Originality/value – While previous research suggests that investment choices may be influenced by self-expressive motivations, to date, it remains unclear whether and when individual investors are actually willing to trade-off the focal goal of maximizing financial returns for the opportunity to satisfy alternative background goals.

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Section: Contributions To Researchsupporting

confidence: 77%

Section: Contributions To Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Focal versus background goals in consumer financial decision-making

Aspara

Chakravarti

Hoffmann

2015

European Journal of Marketing

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“…Factors that are correlated with attractiveness, such as symmetry, are desirable not just for human faces but for many other stimuli, such as birds and wristwatches (Halberstadt and Rhodes 2000;Kubovy 2000). In the consumer domain, this innate draw toward beauty is manifested by favorable responses to aesthetic designs, including a desire to own an attractive product (Norman 2004) and to pay more for it (Bloch, Brunel, and Arnold 2003), even in categories such as finance for which aesthetics are deemed to be irrelevant (Townsend and Shu 2010). …”

Section: The Beauty Premiummentioning

confidence: 99%

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

Cryder

Botti

Simonyan

2017

Journal of Marketing Research

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The Charity Beauty Premium: Satisfying Donors' Want versus Should DesiresDespite widespread conviction that neediness is the most important criterion for charitable allocations, we observe a "charity beauty premium" in which donors often favor beautiful, but less needy charity recipients. We propose that donors hold simultaneous, yet incongruent preferences of wanting to support beautiful recipients (who tend to be judged as less needy) yet believing they should support needy recipients instead. We additionally 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. We test these propositions in several ways. First, when a beautiful recipient is introduced to basic choice sets, it 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. Attractive donation targets, such as giant pandas, often receive the lion's share of charitable contributions in the animal world, whereas needier but less photogenic creatures, such as the pygmy sloth, remain neglected (IUCN Red List 2014). This is one example of donation patterns that tend to overlook the world's neediest recipients; for example, of the more than $350 billion donated in the United States in 2014, only 4% went directly to international affairs, a fundraising category that encompasses the developing world where the most pressing human needs exist (Giving USA 2015; UNICEF 2014).In this research, we propose one reason why the neediest recipients may be overlooked: donors are swayed by recipient beauty. People naturally ascribe favorable qualities, and grant disproportionate benefits, to beautiful individuals in a phenomenon known as the "beauty premium" (Dion, Berscheid, and Walster 1972;Langlois et al. 2000). In the prosocial domain, however, a preference for beautiful recipients could lead to puzzling allocation choices. Previous research on recipient beauty and charitable giving shows seemingly contradictory patterns: some findings indicate that donors prefer beautiful recipients (Mims, Hartnett, and Nay 1975;West and Brown 1975), whereas other findings indicate that donors prefer less beautiful, needier recipients (Fisher and Ma 2014). In the current research, we attempt to understand the psychology behind both patterns. We posit that donors hold simultaneous, yet incongruent preferences including that they want to give to beautiful recipients but think they should give to needy recipients instead. In line with this notion, we find that when donors make decisions intuitively, their want preference for beautiful recipients emerges, whereas when they make d...

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“…Previous research in both marketing/consumer behavior (e.g., He, Inman, and Mittal 2008;Raghubir and Das 2010;Townsend and Shu 2010) and in behavioral economics/finance (e.g., Kahneman and Tversky 1979) has studied how different amounts of information and framing of information may affect investment decisions, thereby providing implicit guidance on how different kinds of investor-directed ads might work (albeit not explicitly studying "advertising"). Typically, this research has concentrated on the effects of different framings of financial information (related to risk and return) on investor behavior, or the effects of non-financial information such as information related to patriotism or social responsibility (e.g., Getzner & Grabner-Kräuter 2004;Statman 2004;Ke et al 2010).…”

Section: Contributions To Researchmentioning

confidence: 99%

Investors’ reactions to company advertisements: the persuasive effect of product-featuring ads

Aspara

Chakravarti

2015

European Journal of Marketing

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Purpose. This article focuses on product-featuring advertising targeted to stock investorsthat is, ads that provide investors with impressions about the company's products, over and above financial information. The purpose is to explicate and test the psychological mechanisms by which such ads may exert influence on investors.Design/methodology/approach. An experiment is conducted with a representative sample of real investors, to test the effect and explore the underlying mechanisms. Two additional lab experiments reveal moderating factors of this effect.Findings. The results show that highlighting the company's product features in an investor ad increases investors' interest in investing in the company's stock, by enhancing investors' subjective evaluations of the company's products. This effect emerges independent of factors related to preexisting brand perceptions (e.g., brand recognizability and likeability) and is mediated by dual causal channels: by increasing expectations about the company's financial returns and by increasing affective attachment with the company's products.Research limitations/implications. The findings identify and confirm different mechanisms of the effect of investor ads, but the relative magnitude of the effects is not generalizable. Practical implications.The results provide corporate marketing, corporate communications, and investor relations professionals insights into how investors may be attracted by productfeaturing advertisements.Originality/value. The study is the first to explicate the different channels of influence through which product-featuring ads may affect investors' willingness to invest in companies.Keywords: Investor advertising, investor marketing, investment behavior, financial decision making, stock investing, consumer behavior in financial markets, stock market, investor advertisements, stock advertisements, brand image, brand recognition, brand perceptions 2 Marketing researchers as well as executives (e.g., Bobinski and Ramirez 1994;Karrh 2004;Kotler et al. 2004) are increasingly interested in how firms can advertise themselves to investors. What fuels this interest, is the increased stock market participation by ordinary consumers, who invest for their retirement plans (e.g., Raghubir and Das 2010), or wish to follow the footprints of celebrity investors like Warren Buffett or CNBC's Jim Cramer (Karniouchina et al. 2009). Although much of the stock market participation of consumers occurs indirectly through mutual funds, many consumers also invest directly in stocks. For example, by running ads in retail investor 1 publications (e.g., Better Investing Magazine), Home Depot has become one of the most widely-held stocks among U.S. individual investors. Also, the stock price of Smithfield Foods reportedly rose almost 10% during a ten day spell following a single investor-targeted ad in the Wall Street Journal (Theiss 2004).Indeed, Capon et al. (1996) reported that approximately 25% of individual investors are "advertising-driven." From a marketing per...

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When and how aesthetics influences financial decisions

Cited by 77 publications

References 21 publications

Focal versus background goals in consumer financial decision-making

Focal versus background goals in consumer financial decision-making

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

Investors’ reactions to company advertisements: the persuasive effect of product-featuring ads

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