Stories | March 12, 2013

Just thinking about money can change what we do

As surprising as it might sound, what you have as your computer screensaver might actually influence your financial decisions.

The same goes for other seemingly insignificant details, such as seeing a pile of fake money. This phenomenon is known as ”priming” – or the tendency for the mere exposure to a concept to influence our subsequent behaviour.

Subtle exposure to cues - words, images or symbols - can shift our mindsets and systematically sway our behaviour. Amazingly, this influence happens without us even being consciously aware of the priming cues. And it pays to be wise to the notion, as others can use it to their advantage.

I can fend for myself
Kathleen Vohs of the University of Minnesota studies the psychological effect of money on people. She and her colleagues ran a series of nine experiments and found that the idea of money makes people more independent and self-sufficient, but also more selfish.
The researchers used the technique of priming, exposing participants to the concept of money to see if that changed what the subjects did next. They primed people for the concept of money simply by leaving a stack of Monopoly money in their peripheral vision, or by having the people do a sentence-unscrambling task that included words associated with money (such as ”salary”), or by sitting them at a computer with a screen saver showing dollar bills floating in water. They found that the participants primed for money were subsequently more self-sufficient, in that they spent a longer time working on a difficult problem before asking someone for help, and chose to work alone on a later task rather than working with a partner. But they were also more self-interested: they donated less money, volunteered less of their time to help a fellow student and even picked up fewer pencils when the researcher dropped a box of them on the floor.
Such experiments can have “real life” implications. Think for a moment: are subtle cues preventing you from donating as much money as you would like to a special cause?

Taking the short view
Research released in 2012 showed that priming people with the idea of poverty leads them to prefer a small reward now over a larger reward in the future. These ideas of delayed gratification and discounting the importance of decisions the further in the future they fall is an important area of study (particularly for pension planning). In the poverty test, academic Lei Liu and colleagues asked participants to count the number of people shown in a series of photos; for half of the participants the photos were scenes of poverty while the other half saw scenes of affluence. After this task, the participants were given the choice of earning a small wage for the job immediately, or a larger wage in three days time. On average, the people who saw scenes of poverty preferred the immediate small reward. What is fascinating about this research is that it demonstrates that perceived poverty, not actual poverty or a constraint of resources, leads people to discount the importance of decisions about the future at a high rate. Interestingly, the cues of poverty may be linked with the idea of an unreliable future, which has also been shown to encourage taking an immediate return over waiting for a larger return later which may never materialise.

Consider your surroundings
These studies illustrate just how incredibly subtle priming cues can be while still affecting our behaviour. The background scenes of poverty or affluence were not at the forefront of the participants’ minds while they believed the task to be about correctly counting the number of people shown. And surely most people don’t think too deeply about their screen saver.
Unless you live in a bubble, it is impossible to avoid being influenced by the environment around you. Savvy marketers can try to take advantage of this. Cues can have priming effects that last up to a day or more, but fortunately, it is generally believed that if and when you are aware of the priming, the effects are reduced or eliminated.
Next time you are making financial decisions, whether it is deciding how to invest your savings, negotiating your salary, or writing your supermarket shopping list, consider what symbols or words have primed you. Think also before making a donation or choosing whether to spend now rather than save for later.

Nathalie Spencer
Nathalie Spencer

Behavioural scientist at ING