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

Jaakko Aspara

Hanken School of Economics; Aalto University School of Business (formerly known as Helsinki School of Economics)

Amitav Chakravarti

New York University (NYU) - Department of Marketing

Arvid O. I. Hoffmann

University of Adelaide - Business School; Network for Studies on Pensions, Aging and Retirement (Netspar)

Date Written: January 28, 2015

Abstract

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

Suggested Citation

Aspara, Jaakko and Chakravarti, Amitav and Hoffmann, Arvid O. I., Focal versus Background Goals in Consumer Financial Decision-Making: Trading Off Financial Returns for Self-Expression? (January 28, 2015). European Journal of Marketing, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2060289 or http://dx.doi.org/10.2139/ssrn.2060289

Jaakko Aspara

Hanken School of Economics ( email )

P.O. Box 479
Helsinki, Helsinki 00101
Finland

Aalto University School of Business (formerly known as Helsinki School of Economics) ( email )

P.O. Box 21230
Helsinki, 00076
Finland

Amitav Chakravarti

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Arvid O. I. Hoffmann (Contact Author)

University of Adelaide - Business School ( email )

10 Pulteney Street
Adelaide, South Australia 5005
Australia

Network for Studies on Pensions, Aging and Retirement (Netspar)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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