Database consumption

Unfixed Resources: Perceived Costs, Consumption, and the Accessible Account Effect

Abstract. Consumption depletes one's available resources, but consumers may be unaware of the total resources available for consumption and, therefore, be

Living in Data: A Citizen's Guide to a Better Information Future (Paperback)

Jer Thorp’s analysis of the word “data” in 10,325 New York Times stories written between 1984 and 2018 shows a distinct trend: among the words most closely associated with “data,” we find not only its classic companions “information” and “digital,” but also a variety of new neighbors—from “scandal” and “misinformation” to “ethics,” “friends,” and “play.”To live in data in the twenty-first century

Malleable Mental Accounting: The Effect of Flexibility on the Justification of Attractive Spending and Consumption Decisions

Mental accounts are often characterized as self‐control devices that consumers employ to prevent excess spending and consumption. However, under certain conditions of ambiguity, the mental accounting process is malleable; that is, consumers have flexibility in assigning expenses to different mental accounts. We demonstrate how consumers flexibly classify expenses, or construct accounts, to justify spending. An expense that can be assigned to more than one account (i.e., an ambiguous expense) is more likely to be incurred than an unambiguous expense that is constrained either by existing budgets or by previously constructed accounts. We explore the justification processes that underlie these results and their implications for mental accounts as self‐control devices.

Tightwads and spendthrifts: An interdisciplinary review

Consumers rely on a “pain of paying” to help deter their spending. While this is beneficial for some consumers, others experience levels of pain that create problems. “Tightwads” experience too much pain when considering spending and therefore spend less than they would ideally like to spend. By contrast, “spendthrifts” experience too little pain and therefore spend more than they would ideally like to spend. Neither are happy with how they handle money. In the decade since the tightwad‐spendthrift construct was introduced, much has been learned about what it is and is not (e.g., frugality, greed), what contextual factors are likely to reduce its importance, how it plays a role within romantic relationships, and when it might first emerge in childhood. This paper reviews the wide range of interdisciplinary research relevant to the tightwad‐spendthrift construct and proposes several directions for new research.

The Red and the Black: Mental Accounting of Savings and Debt

In the standard economic account of consumer behavior the cost of a purchase takes the form of a reduction in future utility when expenditures that otherwise could have been made are forgone. The reality of consumer hedonics is different. When people make purchases, they often experience an immediate pain of paying, which can undermine the pleasure derived from consumption. The ticking of the taxi meter, for example, reduces one's pleasure from the ride. We propose a “double-entry” mental accounting theory that describes the nature of these reciprocal interactions between the pleasure of consumption and the pain of paying and draws out their implications for consumer behavior and hedonics. A central assumption of the model, which we call prospective accounting, is that consumption that has already been paid for can be enjoyed as if it were free and that the pain associated with payments made prior to consumption (but not after) is buffered by thoughts of the benefits that the payments will finance. Another important concept is coupling, which refers to the degree to which consumption calls to mind thoughts of payment, and vice versa. Some financing methods, such as credit cards, tend to weaken coupling, whereas others, such as cash payment, produce tight coupling. Our model makes a variety of predictions that are at variance with economic formulations. Contrary to the standard prediction that people will finance purchases to minimize the present value of payments, our model predicts strong debt aversion—that they should prefer to prepay for consumption or to get paid for work after it is performed. Such pay-before sequences confer hedonic benefits because consumption can be enjoyed without thinking about the need to pay for it in the future. Likewise, when paying beforehand, the pain of paying is mitigated by thoughts of future consumption benefits. Contrary to the economic prediction that consumers should prefer to pay, at the margin, for what they consume, our model predicts that consumers will find it less painful to pay for, and hence will prefer, flat-rate pricing schemes such as unlimited Internet access at a fixed monthly price, even if it involves paying more for the same usage. Other predictions concern spending patterns with cash, charge, or credit cards, and preferences for the earmarking of purchases. We test these predictions in a series of surveys and in a conjoint-like analysis that pitted our double-entry mental accounting model against a standard discounting formulation and another benchmark that did not incorporate hedonic interactions between consumption and payments. Our model provides a better fit of the data for 60% of the subjects; the discounting formulation provides a better fit for only 29% of the subjects (even when allowing for positive and negative discount rates). The pain of paying, we argue, plays an important role in consumer self-regulation, but is hedonically costly. From a hedonic perspective the ideal situation is one in which payments are tightly coupled to consumption (so that paying evokes thoughts about the benefits being financed) but consumption is decoupled from payments (so that consumption does not evoke thoughts about payment). From an efficiency perspective, however, it is important for consumers to be aware of what they are paying for consumption. This creates a tension between hedonic efficiency and what we call decision efficiency. Various institutional arrangements, such as financing of public parks through taxes or usage fees, play into this tradeoff. A producer developing a pricing structure for their product or service should be aware of these two conflicting objectives, and should try to devise a structure that reconciles them.

Seven Takeaways on Convenience and News - Nieman Reports

In “Against Convenience,” Nieman Fellow Gabe Bullard delves into modern media consumption habits

Evolution of Consumption: A Psychological Ownership Framework

Technological innovations are creating new products, services, and markets that satisfy enduring consumer needs. These technological innovations create value for consumers and firms in many ways, but they also disrupt psychological ownership––the feeling that a thing is “MINE.” The authors describe two key dimensions of this technology-driven evolution of consumption pertaining to psychological ownership: (1) replacing legal ownership of private goods with legal access rights to goods and services owned and used by others and (2) replacing “solid” material goods with “liquid” experiential goods. They propose that these consumption changes can have three effects on psychological ownership: they can threaten it, cause it to transfer to other targets, and create new opportunities to preserve it. These changes and their effects are organized in a framework and examined across three macro trends in marketing: (1) growth of the sharing economy, (2) digitization of goods and services, and (3) expansion of personal data. This psychological ownership framework generates future research opportunities and actionable marketing strategies for firms aiming to preserve the positive consequences of psychological ownership and navigate cases for which it is a liability.

Consumers’ Mental Representation of Expenditures: Implications for Spending and Savings Decisions

Abstract People’s mental representation of expenditures is crucial to their budgeting. This article proposes that much like how they represent natural kinds (e.g., animals and plants), people represent expenditures in a hierarchical taxonomy. Seven studies, supported by six norming studies and three pilots, revealed that expenditures are represented hierarchically. We first recover people’s mental representations using a successive pile-sort method that asks people to form hierarchies of categories with common expenditures (e.g., rent, dining out, etc.). The pile-sort reveals consensus in people’s representations of expenditures and that these representations are relatively stable over time. Further, people’s adjustment in their spending behavior can be predicted by the distance between items in their representation. Specifically, when people overspent on an item, they spontaneously adjust spending more on taxonomically closer items. We examine this spontaneous adjustment behavior using both laboratory studies and field data with 6.5 million grocery shopping trips over 12 years. The findings highlight the connection between mental representation and consumer behavior, and they emphasize the importance of studying concepts and categories in the context of consumption.

Food, foragers, and folklore: the role of narrative in human subsistence

Narrative is a species-typical, reliably developing, complex cognitive process whose design is unlikely to have emerged by chance. Moreover, the folklore record indicates that narrative content is consistent across widely divergent cultures. I have argued elsewhere that a storyteller may use narrative to manipulate an audience's representations of the social and/or physical environment to serve his or her own fitness ends. However, my subsequent research suggests that such manipulation results from a broader selection pressure which narrative effectively alleviates: information acquisition. By substituting verbal representations for potentially costly first-hand experience, narrative enables an individual to safely and efficiently acquire information pertinent to the pursuit of fitness in local habitats. If this hypothesis is true, narrative should be rich with information useful to the pursuit of fitness. One class of information integral to the accomplishment of this task is foraging knowledge. In this paper, then, I present evidence that foraging peoples use narrative to transmit subsistence information: specifically, I demonstrate how various narrative devices (e.g., setting, description, mimicry, anthropomorphism) are used to communicate foraging knowledge.

Reframing our relation to our data | Ronen Tamari

From data as digital exhaust to data as digital trails to collective wisdom.

Mental Budgeting and Consumer Decisions

Abstract. Consumers often set budgets for categories of expenses (e.g., entertainment) and track expenses against their budget. Because budgets cannot perf

Personal data storage is an idea whose time has come

Data Ownership as a conversation changes when data resides primarily with people-governed institutions rather than corporations.