Hi, so welcome back to Human Emotion.
Today we're going to continue to talk about
the ways in which emotions shape our judgments and decisions
when it comes to money.
[Question Does our wallet reflect our feelings?]
So again we're going to be trying to pick up this question of,
in what way does our wallet reflect our feelings,
and also looking at the other direction of what way
do our emotions actually shape the kinds of economic decisions that we make,
how we spend our money whether or not to save our money,
should we donate to charity and precisely how should we try to
save for our long term future.
And really what does emotion have anything to do with these questions.
[Human Emotion Judgment & Decision Making II: Emotion and Spending
So this will be our second module looking at judgment and decision making,
Can feelings shape our spending?]
and today we'll be talking about emotion and spending.
So here we'll be looking at this question as you can see here.
Can feelings actually shape our spending?
So this is a roadmap that will take us to this question.
[Roadmap
Emotion and Consumption
Neuroeconomics of Emotion
Take-Away Questions
Expert Interview]
We'll start by looking at emotion and consumption.
So in what way does emotion shape the kinds of things that we consume,
in terms of you know what we buy and how we spend.
Then we'll look at this field of neuroeconomics of emotion,
a really novel interdisciplinary field that tries to integrate
across psychology, economics and neuroscience to understand what is the brain basis.
You know the ways in which we spend our money and think about our money,
then we'll conclude with our takeaway questions and expert interview.
So let's start with this topic of emotion and consumption
and thinking precisely how does emotion shaped the way
that we spend our money and consume products in the world around us.
[Emotion & Consumption]
So we all know that emotions play some role
in how we buy things and what we buy.
You can see advertisements here that really try to provoke us
to elicit feelings maybe a desire or of pride and status,
and in some way, it seems that the very ads that we see, you know,
just everywhere in our everyday life in some ways are picking up on emotions
and those emotions in some way maybe shaping the kinds of things we want
whether it's a you know diamond studded cell phone
or a really fancy car some really cool clothes,
but really precisely how do emotions shape our behavior patterns of,
you know, financial consumption.
I think it's important to start with this question of
[What is Consumption?
Consumption is the process in which goods/services are bought and used
to serve people’s wants (luxuries) and needs (necessities)
what do we mean by consumption in the first place.
Necessities are goods/services for which demand is insensitive
to changes in consumer income (e.g., medicine)
Luxuries are goods/services for which demand is sensitive
So here I'm just going to walk through the very basic definition.
to changes in consumer income (e.g., jewelry)
Most consumption in the US is the consumption of luxuries]
So consumption is the process in which goods and services are bought and used
to serve people's wants, which are called luxuries, as well as their needs or necessities.
Necessities are goods and services for which a demand is insensitive
to changes and consumer income, such as medicine,
whereas luxuries by contrast, our goods and services for which demand
is sensitive to changes and consumer income.
So things like jewelry or fancy clothing or a fancy car.
So, most consumption interestingly United States is the consumption of luxuries,
instead of necessities.
[Why do we spend money to eel negative?
So for example, one of the kind of luxuries we often spend our money on
Consumer research generally assumes that we pursue and avoid pain.
So, why do many people enjoy and pay money to be terrified?
Why do other people dislike horror films
and wouldn’t go even if they were paid?]
that's an everyday kind of luxury is spending money on movies.
And I think one of the most taxing questions here
when we think about how we spend our money in this kind of luxury is,
why do we spend money to feel negative?
Why do we pay to watch horror films like The Grudge or Saw
you can think of many others that actually make us feel feelings of fear or disgust.
So this has been a really perplexing question in this field
for some time now, right,
because consumer research should assume that as human beings
we would pursue pleasure and try to avoid pain.
So then why would so many people enjoy and pay money to be terrified?
We have giant industries devoted to, you know, horror films.
And why do other people seem to dislike horror films
and wouldn't go even if someone paid them to go?
So what is this relationship between spending money and eliciting negative emotions?
So, some colleagues did a study to really try to answer this at least
[Why do we consume negative emotion?
(Andrade & Cohen, 2007)
Participants:
2 groups: Participants who enjoy or dislike horror films
Method:
Rate their emotional states before and after watching a horror movie clip
Results
as the first pass as to why do we consume negative emotions.
Participants who enjoy horror films experience same increase
in negative emotion as those who dislike horror films
But, they also experience increased positive emotion.
Participants who don’t like horror films don’t experience increased positive emotion.
So in this study they had participants in two groups.
Authors propose that the co-occurrence of positive and negative affect
They had participants who enjoy horror films or dislike horror films
is particularly pleasurable]
and maybe you can think of yourself in which category you fall into
whether you like horror films or you'd rather kind of stay away from them.
And then the method that they employed here with these two groups of people
is they have them rate their emotional states before and after watching a very horrific movie clip
And here's what they found.
So the results suggest that participants who enjoyed horror films
experienced the same increase of negative emotion
as those who dislike horror films.
So it's pretty wild, right, people who do and do not like horror films,
both feel the same degree of negative emotionality and the same intensity
of that experience when they watch these films.
But here's the crucial difference.
They also experienced increases in positive emotion.
a very horrific movie clip.