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Instructions Topic: Social Exclusion and Housing 2. Thesis: clear statement of argument at the outset (ideally in the introduction), novelty! 3. Research: breadth and depth of research focusing on argument. 4. Analysis: critical, interdisciplinary, depth, focus on argument, logic, balance 5. Originality: novelty, insight, thought-provoking. 6. Evidence: primarily scholarly references to support claims; avoid quotations, instead paraphrase authors’ ideas using your own words and citing source. 7. Readings: Course readings have been provided as attachments below. References to course readings do not necessarily have to be central to argument. However, reference to some course material is required. Outside readings welcome. 8. Organization: clear structure throughout paper i.e. introduction, development of argument by articulating the key claims with supportive references, conclusion 9. Style: clarity, flow, avoid long sentences and paragraphs, correct citation format (any but be consistent e.g. APA[1], McGill or the like) and grammar. 10. Length: maximum 5 double-spaced pages. Do not waste space and time describing the topic without developing your argument or discussing issues that are not central to the argument of your paper. 11. Deadline: April 6th, 2022 untitled 122 � 2012 by JOURNAL OF CONSUMER RESEARCH, Inc. ● Vol. 40 ● June 2013 All rights reserved. 0093-5301/2013/4001-0008$10.00. DOI: 10.1086/668900 Show Me the Honey! Effects of Social Exclusion on Financial Risk-Taking ROD DUCLOS ECHO WEN WAN YUWEI JIANG This research examines the effects of social exclusion on a critical aspect of con- sumer behavior, financial decision-making. Specifically, four lab experiments and one field survey uncover how feeling isolated or ostracized causes consumers to pursue riskier but potentially more profitable financial opportunities. These daring proclivities do not appear driven by impaired affect or self-esteem. Rather, inter- personal rejection exacerbates financial risk-taking by heightening the instrumen- tality of money (as a substitute for popularity) to obtain benefits in life. Invariably, the quest for wealth that ensues tends to adopt a riskier but potentially more lucrative road. The article concludes by discussing the implications of its findings for behavioral research as well as for societal and individual welfare. Social exclusion (i.e., being alone, isolated, or ostracized,sometimes with explicit declarations of dislike, but other times not; Baumeister et al. 2005; Williams 2007) is a rather common experience. Romantic relationships dis- solve; people are ignored at parties or in office conversa- tions; offers of friendship are rebuffed. Suggestive of the universality of the phenomenon, metaphors such as “getting the cold shoulder,” “being left behind,” or “getting dumped” are found in numerous languages around the world. And while one might hope that recent advances in communi- Rod Duclos (
[email protected]) is assistant professor of marketing at the Hong Kong University of Science and Technology, Clear Water Bay, Hong Kong. Echo Wen Wan (
[email protected]) is associate professor of marketing at the University of Hong Kong, Pokfulam Road, Hong Kong. Yuwei Jiang (
[email protected]) is assistant professor of marketing at the Hong Kong Polytechnic University, Hung Hom, Hong Kong. This research was supported in part by the Asian Center for Branding and Marketing and the Research Grants Council of Hong Kong via grants DAG08/09.BM09 and GRF 640509 awarded to the first author; grant HKU 752908H awarded to the second author; and grants PolyU 4-ZZ6C, PolyU A-PK03, GRF 5442/10H, and ECS 5514/12H awarded to the third author. For their help with prior versions of this manuscript, the authors are in- debted to Jim Bettman, Bob Wyer, and the members of the review team. Special thanks are also extended to Rashmi Adaval, Amy Dalton, Maria Galli, Jiewen Hong, Tom Meyvis, A� Mukhopadhyay, A. V. Muthukrish- nan, Jaideep Sengupta, Mark Wu, Rongrong Zhou, Fuzz, Paul, and Spot. For correspondence, please contact Rod Duclos. Ann McGill served as editor and Baba Shiv served as associate editor for this article. Electronically published December 6, 2012 cation technologies and social media decrease the prevalence of social exclusion, recent research shows that modern so- cieties have in fact become lonelier places in the last 40 years. Twenge, Catanese, and Baumeister (2002) found, for instance, that people entertain fewer stable relationships and, as a result, feel generally less connected to others. In the same vein, Putnam (1995, 2000) found that Americans today are less likely to join organizations and visit friends than were their elder generations. Finally, statistics from the US Census Bureau (1998) reveal that the proportion of citizens living alone doubled from 13% in 1960 to 26% at the turn of the twenty-first century. Part of this growth, note Twenge et al. (2002), is caused by the sharp increase in divorce rates, another clear indicator of unstable social relations. Noting the prevalence and sometimes severe conse- quences of social exclusion, Mead et al. (2011) were the first to examine this phenomenon’s ramifications for con- sumption behavior. Most notably, these authors found that thwarting consumers’ need for social connection leads them to spend strategically in service of affiliation. For illustra- tion, relative to control, excluded participants in their studies were more likely to buy a product symbolic of group mem- bership, tailor their spending preferences to those of an in- teraction partner, spend money on an unappealing food fa- vored by a peer, and try cocaine if doing so granted them an opportunity to commence social connections. Seeking to extend this work, the present paper examines the effects of social exclusion on another important consumption area, financial decision-making. Consumers’ welfare largely depends on the soundness of their financial decisions (e.g., choosing mortgages, saving D ow nloaded from https://academ ic.oup.com /jcr/article/40/1/122/1792220 by York U niversity Libraries user on 05 April 2022 mailto:
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[email protected] DUCLOS, WAN, AND JIANG 123 to fund college education or retirement, using credit cards to fund current consumption, deciding how to pay for health care and insurance, investing in the stock market, etc.). In many such domains, however, consumers often lack appro- priate information and/or knowledge, which renders them susceptible to serious biases with large personal and societal consequences. Consistent with this assessment, the 2011 Consumer Financial Literacy Survey by the National Foun- dation for Credit Counseling (NFCC) reports that 56% of Americans do not maintain a budget or track their expen- ditures; 33% do not have any nonretirement savings; 40% carry credit-card debt from month to month; 28% do not pay all their bills on time; 7% have debt in collection; and a record 41% would give themselves a grade of C, D, or F on their knowledge of personal finance. Admittedly, many environmental and personal factors in- teract to shape one’s financial decisions. The present work seeks to examine the influence of one such factor, social exclusion, on financial risk-taking. Specifically, this article intends to document when and explain why feeling excluded fosters riskier but potentially more lucrative decisions by consumers. With this in mind, our empirical inquiry pre- views as follows. Study 1 examines whether feeling excluded from (vs. included in) a group exercise influences in a seemingly un- related gambling survey participants’ preferences for a risk- ier (i.e., low odds/high reward) but potentially more lucra- tive lottery. Study 2 ascertains the directional impact of social exclusion (vs. inclusion) on financial decisions. That is, does social exclusion foster risk taking or, in contrast, does inclusion breed preferences for safer alternatives? Seeking to consider the role of affect in the process, study 2 also examines whether negative mood in general and sad- ness in particular influence consumers’ decision making. Study 3 sheds light on the mechanism by which consumers come to favor riskier investment schemes. Extending this effort, study 4 assesses when and why consumers may or may not make risky financial decisions. In parallel, studies 3 and 4 consider the possible influence of affect and self- esteem in the process. Finally, study 5 examines the impact of social exclusion on financial risk-taking outside the lab. Specifically, study 5 aims to ascertain whether our experi- mental findings replicate in the real world with heteroge- neous populations (e.g., in age, income, education) facing various levels of chronic social exclusion. In sum, our five studies (i.e., four experiments and one field survey) initiate a line of research intended to test when and explain why social exclusion causes financial risk-taking. THEORETICAL BACKGROUND In a social system, people obtain what they want via two primary means, popularity and money. Popularity refers to being liked, supported, or admired to the point where others are willing to provide (sometimes at a cost to themselves) what one needs to flourish in life and protect against un- expected or unwanted events. Similarly, monetary assets can help secure the resources one needs to maintain control over one’s life’s course as well as the autonomy to choose and pursue the activities consistent with one’s goals, beliefs, and values. Because money and group membership can help acquire similar benefits, consumers are likely to turn to money (as a substitute for popularity) when their efforts to seek and/ or maintain social connections are thwarted. Consistent with this idea, prior research on the symbolic power of money finds that, relative to socially included counterparts, ex- cluded participants are less willing to donate funds for or- phans; exhibit stronger desires for money (as suggested by their overestimation of coin sizes); and, finally, experience more distress when merely thinking about money they spent previously (Zhou, Vohs, and Baumeister 2009). Interest- ingly, this psychological distress can be reduced if partici- pants are allowed to touch money again in a bill-counting task. Extending this work, we propose that, in absence of social support, forlorn consumers will need significantly more money to secure what they need out of the social system. As such, experiencing interpersonal rejection should heighten the instrumentality of money as a means for obtaining benefits from the world. The ensuing quest for money, we predict, may foster riskier but potentially more lucrative financial decision-making. Separate lines of research in the social sciences support our theorizing and predictions about money as a means to secure control in life. Money and Control For Furhnam (1984), money serves not only to acquire what one needs, wants, or desires but also to impress and control others. Similarly, works by Tang (1995) and Yam- auchi and Templer (1982) stress the power that money af- fords. Money empowers consumers to control their life by freeing them from budget constraints, thereby enabling them to select the products and services best suiting their pre- rogatives. The literature on health and well-being also provides evi- dence suggesting a link between money and control in life. Using national probability samples, Lachman and Weaver (1998) found that, compared to low-income counterparts, high-wage earners