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Low-socioeconomic-status (SES) consumers tend to be more price sensitive than their high-SES counterparts. Nonetheless, various economic-related burdens, such as mobility costs and lack of information, often hinder their ability to attend to scarcity—a phenomenon called "ghetto tax." The current research moves a step further to show that even when very poor consumers can exert price sensitivity and are fully informed, a "psychological ghetto tax" often discourages them from doing so. Across five studies, the authors demonstrate that, relative to (1) high-SES consumers or (2) contexts of intragroup interaction, low-SES consumers are willing to pay higher prices and to accept lower-value rewards to avoid commercial settings that require intergroup interaction (e.g., poor consumers in a high-end shopping mall). This effect is driven by the poor consumers' heightened expectations of discrimination in upscale commercial settings, a concern virtually nonexistent among wealthy consumers. Companies' inclusion statements emphasizing customer equality and/or customer diversity can serve as safety cues against stigmatized identities and increase low-SES consumers' price sensitivity. [ABSTRACT FROM AUTHOR]

In an experimental setting, we study the role of emotions in markets. Our experimental market is modeled on those of Smith, Suchanek, and Williams (1988) and Caginalp, Porter, and Smith (2001). Participants take part in a laboratory market in which they trade a risky asset over a computer network. Prior to trading, they watch short videos that are exciting and upbeat—chase scenes; neutral—segments from a historical documentary; fearful—scenes from a horror movie; or sad—scenes from a drama. Larger asset pricing bubbles develop in experimental markets run subsequent to the exciting videos relative to the other three conditions. The differences in the magnitude and amplitude of the bubbles are both economic and statistically significant. A follow-up study indicates that the phenomenon may be explained by excited people’s greater inclination to extrapolate past positive market trends into future asset prices.

When considering a charitable act, consumers must often decide on how to allocate their resources across a multitude of possible causes. This article assesses how the relative "urgency" of the causes under consideration (i.e. how critical to human survival the causes are) shapes preferences for specific causes among higher and lower social class consumers. Across a series of studies in a highly unequal socioeconomic environment (Rio de Janeiro, Brazil), we demonstrate that lower-class consumers prefer to donate to urgent causes (e.g. alleviating hunger) compared to non-urgent causes (e.g. encouraging cultural activities), whereas the effect reverses among higher-class consumers. Contrasting experiences with scarcity across social classes vary the consumers' intrinsic sympathy toward people's unmet basic needs, which in turn shapes donation allocation preferences. Consistent with this theoretical rationale, class differences in charitable allocations decrease when (a) vivid contextual cues induce sympathy among both higher- and lower-class consumers or (b) the experience with scarcity is similar across social classes. Thus, although class differences in preferences for specific causes can be shifted with relative ease, our findings suggest that those who have the most to give do not spontaneously prioritize what is most urgently needed in society. [ABSTRACT FROM AUTHOR]

Anecdotal evidence suggests that in a gambling environment consumers may end up betting more than they had initially planned. We assess this phenomenon using sequential and fair gambles in a two-stage process (planned and actual bets). The results show that in the planning phase, people behave conservatively, betting on average less after an anticipated loss and the same amount after an anticipated gain. However, after an actual loss in the first gamble is experienced, individuals bet in a subsequent gamble significantly more than what they had initially planned, whereas on average no differences from the plan are perceived after a gain. We show that the reason for such asymmetry is in part due to people's tendency to underestimate, at the planning phase of the gamble, the impact of negative emotions in betting decisions during the actual phase of the gamble.

One's own emotions may influence others' behavior in a given social interaction. If one believes this, s/he has an incentive to game emotions - to strategically conceal a current emotion or display a non-experienced emotion - in an attempt to influence her/his counterpart. In a series of three experiments, we show that people deliberately conceal (experiment 1) or misrepresent (experiments 2 and 3) their emotional state in a negotiation setting. When given the opportunity to either hide or express their current emotions before playing an ultimatum game, receivers who have reported low (vs. high) level of anger are more likely to conceal their emotion right before the proposers decide on the division of the pie (experiment 1). When the procedure allows participants to change their previously reported emotion, receivers choose to inflate their reported level of anger prior to proposers' decision (experiment 2). Finally, this emotion gaming hypothesis generalizes to positive emotions as well. In a standard trust game, trustees inflate the level of happiness before trusters decide on passing vs. keeping a fixed amount of money to the trustees (experiment 3).

Other people's incidental feelings can influence one's decision in a strategic manner. In a sequential game where a proposer moves first by dividing a given pot of cash (to keep 50% [vs. 75%] of the pot) and a receiver responds by choosing the size of the pot (from $0 to $1), the proposer is more likely to make an unfair offer (i.e., to keep 75% of the pot) to a receiver who watched a funny sitcom (vs. “angry” movie clip) in an unrelated study prior to the game playing. However, when the receiver knows that the proposer has the affective information, and the proposer is aware of this knowledge, the effect dissipates. In other words, a proposer expects a happy (vs. angry) receiver to be more accommodating or cooperative as long as the happy receiver does not realize that the proposer is trying to benefit from receiver's current incidental feelings.

How can the hedonistic assumption (i.e., people's willingness to pursue pleasure and avoid pain) be reconciled with people choosing to expose themselves to experiences known to elicit negative feelings? We assess how (1) the intensity of the negative feelings, (2) positive feelings in the aftermath, and (3) the coactivation of positive and negative feelings contribute to our understanding of such behavior. In a series of 4 studies, consumers with either approach or avoidance tendencies (toward horror movies) were asked to report their positive and/or negative feelings either after (experiment 1) or while (experiments 2, 3A, and 3B) they were exposed to a horror movie. We demonstrate how a model incorporating coactivation principles and enriched with a protective frame moderator (via detachment) can provide a more parsimonious and viable description of the affective reactions that result from counter-hedonic behavior.

The proposed model integrates two streams of research on affect by specifying how evaluative and regulatory mechanisms interact to guide behavior. Two experiments demonstrate that when no mood-changes are expected, the affective evaluation mechanism guides behavior, leading to a monotonic increase in behavioral intentions as affect conditions shift from negative to positive. When participants expect the behavioral activity to change their current affective states, a combination of affect regulation and affective evaluation produces a U shape pattern when a mood-lifting cue is present (experiment 1) and an inverted U shape pattern when a mood-threatening cue is present (experiment 2).

Objective: The present study aimed to (i) assess the appetitive drives evoked by the visual cues of ultra-processed food and drink products and (ii) investigate whether text warnings reduce appetitive drives and consumers' reported intentions to eat or drink ultra-processed products.Design: In Study I, a well-established psychometric tool was applied to estimate the appetitive drives associated with ultra-processed products using sixty-four image representations. Sixteen product types with four exemplars of a given product were included. Pictures from the International Affective Picture System (IAPS) served as controls. The two exemplars of each product type rated as more appetitive were selected for investigation in the second study. Study II assessed the impact of textual warnings on the appetitive drive towards these thirty-two exemplars. Each participant was exposed to two picture exemplars of the same product type preceded by a text warning or a control text. After viewing each displayed picture, the participants reported their emotional reactions and their intention to consume the product.Setting: Controlled classroom experiments SUBJECTS: Undergraduate students (Study I: n 215, 135 women; Study II: n 98, 52 women).Results: In Study I, the pictures of ultra-processed products prompted an appetitive motivation associated with the products' nutritional content. In Study II, text warnings were effective in reducing the intention to consume and the appetitive drive evoked by ultra-processed products.Conclusions: This research provides initial evidence favouring the use of text warnings as a public policy tool to curb the powerful influence of highly appetitive ultra-processed food cues. [ABSTRACT FROM AUTHOR]