Focal versus Background Goals in Consumer Financial Decision-Making: Trading Off Financial Returns for Self-Expression?
European Journal of Marketing, Forthcoming
41 Pages Posted: 16 May 2012 Last revised: 28 Jan 2015
Date Written: January 28, 2015
According to standard (rational) models of (financial) decision-making, consumers should generally have a single strong, normative focal goal when making financial decisions like selecting which stocks to invest in: to maximize risk-adjusted financial returns. Nevertheless, consumers’ financial decisions may also be influenced by other goals that operate in the background, such as the desire to express themselves. The present research examines the interplay between focal and background goals in consumer financial decision-making and identifies several conditions that lead individuals to trade off financial returns for the satisfaction of background goals. Three experiments show that individuals who have (1) been subtly primed with self-expressive background goals, or (2) experienced progress towards the focal goal of financial returns, are willing to accept lower financial returns for the opportunity to invest in stocks that allow for increased self-expression. Further, while subtly primed background goals exert a non-normative influence on investment decisions, (3) explicit cues about an investment’s background goal-instrumentality create a backlash effect, and decrease individuals’ willingness to trade off financial returns.
Keywords: background goals, consumer financial decision-making, focal goals, self-expression, household finance
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