De quiz vragen van het vak van 2022/2023 en aantekeningen van de lectures met aantekeningen van de discussie erbij. De volgende artikelen zijn inbegrepen in de samenvatting:
Page: MEANING, MEASURE, AND MORALITY OF MATERIALISM
Lea & Webley: Money as tool, money as drug
Hsee, C. K., Zhang, J., Cai...
Money and financial behaviour
Reading Week 1
Page: MEANING, MEASURE, AND MORALITY OF MATERIALISM
Why people feel the need to conspicuously consume.
Conspicuous consumption: The showy display of wealth for the purpose of acquiring/ maintaining
status or prestige
• The Theory of the Leisure Class
o the strength of one's reputation is in direct relationship to the amount of money
possessed and displayed;
o The objects of conspicuous consumption must be wasteful, or possess no useful
value, in order to reflect credibly on one's reputation (=Veblen effect)
• Demonstration/ bandwagon/ snob effect
o "Demonstration" or 'Bandwagon' effect-
▪ this effect is an attempt to "keep up with the Joneses" in order to preserve
one's self-esteem
▪ Have what everybody else is having just to keep up/ fit in
o The 'snob" effect : people preoccupied with social status reject products that are
perceived to be possessed by the common populace.
▪ Only limited availability → social prestige by exclusive consumption
o Bandwagon and snob effects offer a skeletal picture of how conspicuous
consumption has moved from the extremes of being an exclusive "invidious
distinction' behaviour, to an activity enjoyed by mass consumers (bandwagon), much
to the dismay of those fighting to keep it exclusive (snob).
• Explanation why people behave pretentiously:
o Social: social class identification, social class mobility, peer/ aspirant group influence
o Personality or innate human desires drive such displays.
Methodology
Specifically, for this study, a judgment sample of research materials was taken from various
economic, sociology, and marketing scholars.
Limitations
• Using a judgment sample for studying the trend of conspicuous consumptive behaviour, a
limit is placed on the theoretical understanding of the topic.
o However, in selecting both a variety of disciplines (economics, sociology, and
marketing), and major works within each discipline, may different viewpoints
regarding conspicuous consumption are analysed, enhancing the report's findings.
• The use of periodization schemes, such as "fitting' general behaviours into specific time
structures
• Yet the purpose of using a periodization framework is to identify dominant trends of
conspicuous consumption over time (It offers an historical look at the then-to-current social
and economic factors behind ostentatious behaviour.)
,The development of conspicuous consumption into three stages:
• Traditional societies (feudal Europe to 1700 A.D.);
• Achieving societies (1860's to the second world war); and,
• Affluent societies (post-World War through the 1970's).
o The post-affluent society (the 1980's and early 1990's in America)→America's
fixation with material possessions.
PERIODS OF CONSPICUOUS CONSUMPTION:
Traditional societies:
• Such societies 'were typified by hierarchical social structures, by marginal changes in
population, and by a clear concentration of wealth at the top of the social pyramid'
• Social mobility was restricted, since people were expected to stay within their place in the
social hierarchy
• Conspicuous consumption was reserved only for those who, either by inheritance or by office
hold, enjoyed status and power
o Never distributed downwards, only during ceremonies and feasts
• The objects of conspicuous display in traditional societies focused primarily on servants,
food, clothing, and housing
Achieving societies:
• Result of the Industrial Revolution which provided income, job, and geographic mobility
opportunities.
• As a result, a financially and politically powerful middle class emerged, adding numerous
players to the traditionally restricted conspicuous ownership game.
• Battle between elite and aristocrats
• Expenditures of this time were clearly conspicuous: bath tubs were cut from solid marble;
artificial waterfalls were installed in dining rooms for entertaining; garden trees were
decorated with artificial fruit made of fourteen carat gold (Lord 1960).
o Spending was intended solely to achieve status and recognition
• Upcoming department stores allowed the purchase of status goods, regardless of the true
status of the buyer
→ Achieving societies in America through the early twentieth century, it is noted that the Veblen
effect is still very prevalent although losing ground to the bandwagon and snob effects.
Affluent societies
• In the "Age of high mass consumption" :
• Following World War II, the U.S. experienced increased distribution of wealth and income
which allowed more people to acquire more things such as; automobiles, houses,
refrigerators, airplanes, etc.
o As a result, conspicuous consumption has predominantly lost its effectiveness as a
means of providing invidious distinction for the rich.
• The rich have needed to find other venues to advertise their success. One way they have
done this is to purchase outrageously expensive goods that ensure the general exclusion of
the great majority of potential customers → Snob effect
, • Possessions now not only reveal status, but also identify the taste and values of the
possessor.
o Objects of conspicuous display can disclose the ideal self, whether congruent or not
with the real self
• How so different from predecessors: Unlike their predecessors who were inner-directed,
people of affluent societies are other-directed. The primary difference between the two, is
that in inner-directed societies, individual lifestyles are governed and shaped predominantly
by family and friends, whereas in other-directed societies, lifestyles are additionally
influenced by media personalities and the mass public in general.
• Individuals of affluent societies became more "socialised" through mass media, they have
also become more sensitive to the influences of their poem and of those they aspire to be
like. This way, people are consuming in accordance with the value of their desired reference
group. → bandwagon effect/ keeping up with the Joneses
• In response to affluence, marketers have utilized promotional tactics to associate products
with an attractive life style.
o To successfully accomplish this, producers de-emphasize the price, focusing instead
on the social prestige value at the good
Post-affluent societies:
• High materialism in the 1980s.
• Conspicuously consuming a variety of status symbols, yuppies sought not only to impress
others, but also to express themselves as members of an elite professional class.
o Common status expenditures as defined by this group included BMW automobiles,
cellular phones, Rolex watches, loft apartments, CD players, and designer clothing
o cosmetic surgery.
• Faced with slow job mobility, due to the vast number of people competing in the job market,
coupled with a sagging economy and a decline in real income, ambitious baby boomers
rewarded their career efforts with consumption items. Seeking social perfection
When too much is passe
• From self-indulgence to concerns for family, community, and the environment in 1990s
• Status seekers in society are becoming involved in volunteerism, recycling, and promoting
affairs for the good of their community or society in general.
Although society becomes more humanitarian, money remains a symbol of success in US →
conspicuous consumption will find its niche among status sensitive consumers
Lea & Webley: Money as tool, money as drug
Why are people interested in money? (sociobiological answer)
• Doing it confers a selective advantage
• It does not confer a selective advantage now, but did at some point in history of Homo
Sapiens
• The tendency to do it is a by-product of some other tendency, which does/did confer to an
advantage
The three basic functions of money:
, • A medium of exchange
• A unit of account
• A store of value
Money acts as an incentive and as a reinforcer:
• Incentive: people are more likely to perform the action if they are aware that it leads to
obtaining money
• Reinforcer: actions that in the past lead to a person receiving money, are more likely to be
repeated
Strong human motivations:
• Adaptiveness: The motivations direct people towards, or away from, stimuli of obvious
significance for the survival of individuals or the propagation of their genes.
• Darwinian continuity: The motivations are either exact homologues of motives that exist in
all or many related species of animals, or (more commonly) they are obviously derived from
such motives
Is there a biological reason why money is such a powerful incentive?
Tool theory
Money is the most efficient means yet discovered of making such exchanges possible. It is not the
only means
On this view, money is not an incentive in itself; it is an incentive only because and only insofar as it
can be exchanged for goods and services.
Tool theory: we only have to understand the job that money does and the human cognitive system
that enables us to use it
Money mediates between our need to exchange commodities and the limited evaluating power of
our brains
Tool Theory accepts the metaphorical extension of the idea of a tool inherent in the word
“instrumental”; it sees money as a means to an end.
Money is used for purposes such as social display, social communication, or social protection merely
extends the range of uses for money as a tool.
Drug theory
Drug: by mimicking the action of some natural substance, it produces an abnormal response without
being part of an ordered, functional sequence
Perceptual drugs:
• Drug-like action. Evolutionary speaking, these stimuli are functionless, but within the life of
individual organism, they provide gratification
Cognitive drugs:
• Its effect depends on what we know and understand, not on what we perceive; but like
drugs, it elicits a response without delivering the effects that make it adaptive for the
organism to make that response
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller verhoevenmaud. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.75. You're not tied to anything after your purchase.
