Money

 

A businessman looks at money

But is he salivating?

In certain situations, people actually salivate when they desire material things, like money and sports cars, according to a new study in the Journal of Consumer Research.

“In multiple languages, the terms hunger and salivation are used metaphorically to describe desire for non-food items,” writes author David Gal (Northwestern University). “But will people actually salivate when they desire material things?”

The answer, Gal found, is yes. In one study, for example, Gal examined whether people salivated in response to money. “Merely being exposed to the concept of money has been shown to have dramatic effects on behavior, and it has even been argued that money can be conceptualized as a drug in that it imitates the action of biological incentives in driving behavior,” Gal writes. In the experiment, the author measured salivation by having participants put cotton dental rolls in their mouths while they gazed at pictures of money. He later weighed the rolls to measure the amount of saliva.

Before they viewed money, however, Gal primed the participants to feel powerful or to feel that they lacked power. “The main result of the experiment was that participants salivated to money (relative to baseline), but only when they were in a low-power state,” Gal writes. “This suggests that people salivate to non-food items when those are items are desired to fulfill a highly active goal.”

Next, Gal wondered whether men would salivate to high-end sports cars. Instead of looking at their perceived power, he induced some of the men to have a “mating goal,” because prior research has shown that men who want to impress women purchase conspicuous luxury goods. Gal showed the men photos of attractive women and asked them to choose one they would like to date. Gal asked the other group of men to ponder a visit to the barber. The men with the active mating goal salivated more at images of high-end sports cars than the men who had been prompted to imagine getting a haircut.

“Why do people salivate to money and to sports cars?” Gal asks. “One possibility is the increasingly well-established finding that all objects of desire, whether biological or non-biological, activate the same general reward system in the brain. Salivation might merely be the consequence of the activation of this general reward system.”

 

 Caption: Differences between tightwads and spendthrifts are greatest in situations that amplify the pain of paying. But it may be that spending money on gifts is just as painful as usual for tightwads.  Credit: © 2010 Jupiter Images CorporationEvery year about this time, on Black Friday in the U.S., the day after Thanksgiving that traditionally begins the holiday shopping season, early-morning consumers stand in long lines eager to purchase some sought after prize. From the outside, it looks as if these holiday shoppers can’t wait to plunk down their cash, but University of Michigan Marketing Professor Scott Rick says consumers often behave differently than they would ideally like to behave.

"Some consumers chronically spend more than they would like, and some consumers chronically spend less than they would like," he says. Where an individual falls within the range of desiring to spend more or less largely determines whether he or she is a tightwad or a spendthrift, characteristics that determine quite a bit about a person’s spending habits.

Rick says anticipating the psychological pain that goes along with paying money drives some people to spend less than they would like, while not experiencing enough pain causes others to spend more.

 

 Couples who are arithmetically dextrous end up better offCouples who score well on a simple test of numeracy ability accumulate more wealth by middle age than couples who score poorly on such a test, according to a new study of married couples in the United States.

Researchers found that when both spouses answered three numeracy-related questions correctly, family wealth averaged $1.7 million, while among couples where neither spouse answered any questions correctly the average household wealth was $200,000. Numeracy is the ability to reason with numbers and other mathematical concepts, and are skills typically learned during school.

"We examined several cognitive skills and found that a simple test that checks a person’s numeracy skills was a good predictor of who would be a better family financial decision maker," said James P. Smith, a co-author of the study and Distinguished Chair in Labor Markets and Demographic Studies at the RAND Corporation, a nonprofit research organization. The other two authors of the study are John McArdle of the University of Southern California and Robert Willis of the University of Michigan.

 

 Altruism - it could be because of your geneticsDo you like to do good things for other people? If so, your genes might be responsible for this. At least, the results of a study conducted by researchers of the University of Bonn suggest this. According to the study, a minute change in a particular gene is associated with a significantly higher willingness to donate. People with this change gave twice as much money on average to a charitable cause as did other study subjects. 

The researchers working with the psychologist Professor Dr. Martin Reuter invited their students to take a "retention test": The roughly 100 participants were to memorize series of numbers and then repeat them as correctly as possible. They received the sum of five Euros for doing this. Afterwards, they could either take their hard-earned money home or donate any portion of it to a charitable cause. This decision was made freely and in apparent anonymity. "However, we always knew how much money was in the cash box beforehand and could therefore calculate the amount donated", explains Reuter.

 

Big banks - was it the subconscious desires of the bankers that brought them down?The bankers who brought the global economy to its knees two years ago may have enjoyed the sensation of losing hundreds of billions of pounds and plunging the world into recession, according to an academic at Cardiff University.

In an article published in Angelaki: Journal of the Theoretical Humanities, Dr Paul Crosthwaite claims that the willingness of banks to deal in sub-prime loans and related derivatives, which were bound to result in disastrous losses, can only be understood if the bankers unconsciously desired the destruction of their own institutions. Such catastrophic losses, Dr Crosthwaite argues, can be sources of masochistic pleasure for those who experience them.

Dr Crosthwaite, a Lecturer in Literature and Critical and Cultural Theory, draws on anthropological studies of investor behaviour and an analysis of novels by and about financial professionals. He points to evidence that there is an element of masochistic satisfaction in the experience of running up losses, and that a full-blown crash is a source of euphoria as much as despair.

The financial crash, Dr Crosthwaite argues, is the modern equivalent of the traditional Native American practice of ‘potlatch’, a ritual ceremony in which the chiefs of rival tribes competed to destroy ever greater quantities of their own possessions. As with chiefs participating in a potlatch, the capacity to generate huge losses, just as much as huge profits, is experienced by investment bankers and financial traders as an expression of their power, prestige, and importance.

 

ImageAs any nine-to-fiver will testify, a new paycheck brings with it a familiar sense of freedom, albeit one that dwindles in pace with the balance in one’s bank account. But, it’s not the checking account size that influences consumer behavior; rather, it’s the time that has elapsed since payday, according to a new study.

Newly paid consumers are more likely to spend money on "promotion-focused" products and services – those that make their lives better, if even in a small way. As the previous payday gets further away, though, consumers are motivated to choose products that are "prevention-focused" – that preserve their current standard of living.

 

ImageIt is possible to buy happiness after all: when you spend money on others, according to researchers at the University of British Columbia and the Harvard Business School.

Individuals report significantly greater happiness if they spend money “pro-socially” — that is on gifts for others or charitable donations — rather than spending on themselves UBC Asst. Prof. Elizabeth Dunn found in a series of studies reported in the journal Science.

“We wanted to test our theory that how people spend their money is at least as important as how much money they earn,” says Dunn.

The researchers looked at a nationally representative sample of more than 630 Americans, of whom 55 per cent were female. They asked participants to: rate their general happiness; report their annual income; and provide a breakdown of their monthly spending, including bills, gifts for themselves, gifts for others and donations to charity.

“Regardless of how much income each person made,” says Dunn, “those who spent money on others reported greater happiness, while those who spent more on themselves did not.”

 

 

Money - may not make the differnce to happinessWith dogged determination we lie, rob, borrow, gamble and sometimes work too, in the hope of boosting our income. So zealous is our pursuit of money, it’s as if we think it will somehow make us happier, the British Psychology Society reports.. Strangely enough, whilst psychologists and economists have conducted numerous studies showing that the relationship between income and happiness is weak, only one prior study has asked what lay people really believe about money and happiness (and this was focused on middle-income, working women).
 
It’s into this empirical desert that Lara Aknin and colleagues arrive with a survey of hundreds of North Americans of mixed age, gender and wealth. Aknin’s team have found that people do indeed overestimate the link between money and happiness, especially at lower levels of income.
 

Meeting success can depend on hormonesMen and women with more testosterone like to be in charge, the British Psychological Society reports. Indeed, they can find it stressful and uncomfortable when denied the status that they crave. Similarly, people low in testosterone find it uncomfortable to be placed in positions of authority. An intriguing new study has built on these earlier findings, showing a mismatch between testosterone-level and status is associated with group functioning. Groups made up of people whose status in the group doesn’t match their testosterone level tend to have less collective confidence (or "collective efficacy" in the psychological jargon). This could be important given that prior investigations have shown that groups with higher collective efficacy perform better.

 

Most Americans probably have cocaine in your wallet, purse, or pocket. Sound unlikely or outrageous? Think again! In what researchers describe as the largest, most comprehensive analysis to date of cocaine contamination in banknotes, scientists are reporting that cocaine is present in up to 90 percent of paper money in the United States, particularly in large cities such as Baltimore, Boston, and Detroit. The scientists found traces of cocaine in 95 percent of the banknotes analyzed from Washington, D.C., alone.

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