1. Cryder, C.E., Lerner, J.S., Gross, J.J., & Dahl, R.E. (2008). Misery is not Miserly: Sad and Self - Focused Individuals Spend More. Psychological Science, 19, 6, 525 - 30. Prelec, D., & Simester, D. (2001). Always Leave Home Without It. A Further Investigation of the Credit-Card Effect on Willingness to Pay. Marketing Letters, 12, 1, 5 - 12. Kirsten Allanson, Lee Bishop, & Siôn Pickering 1

2.  Article paper - Want to spend less?...  Research paper 1 - Misery is not Miserly…  Aims and Justifications  Method and Results  Discussion  Research paper 2 - Always Leave Home Without It…  Aims and Justifications  Method and Results of Study 1  Method and Results of Study 2  General Discussion  Conclusion 2

3.  Article from BPS research digest blog  Overview  When handing over money, the insula becomes active.  Not so when paying with card because there is no physical loss  Individuals who feel sad spend more http://bps-research-digest.blogspot.com/search?q=begley 3

4.  Publication ◦ Psychological Science  Author 4 Cryder, C.E., Lerner, J.S., Gross, J.J., & Dahl, R.E. (2008). Misery is not miserly – sad and self- focused individuals spend more. Psychological Science, 19(6) 525-30.

5.  Aims & justification ◦ 1– Is MINM moderated by self focus? ◦ 2 – is MINM mediated by self focus? ◦ 3 – Generalisability of MINM 5

6.  Method ◦ 33 participants, volunteer sample ◦ Independent design ◦ Randomly allocated into ‘sad condition’ and ‘neutral condition’. ◦ Self–focusing essay ◦ Buying task ◦ Manipulation check & debriefing 6

7.  Results T-tests show that sad condition participants spent more than neutral condition participants. There was a larger effect in high self-focus group against low self-focus group. 7

8.  Discussion The MINM effect only occurs when self-focus is high Relationship between sadness and spending mediated & moderated by self-focus Other possible interpretations of the data: - mood repair - reduced self value 8

9. Relevance - James (1890) - Contradictory evidence from Capra, Lanier & Meer (2010) – positive mood led to overbidding during an auction task Future research - Test sadness and self-focused when an object is unobtainable - Models in clinical depression, link to compulsive buying (Black et al 1998) 9 Black, D.W., Repertinger, S., Gaffney, G.R. & Gabel, J. (1998). Family History and Psychiatric Comorbidity in Person with Compulsive Buying: Preliminary Findings. American Journal of Psychiatry, 155:960-963. Capra, C.M., Lanier, K.F. & Meer, S. (2010). The effects of induced mood on bidding in random nth price auctions. Journal of Economic Behaviour & Organisation, 75:223-234

10.  Publication ◦ Marketing Letters  Authors ◦ Drazen Prelec ◦ Duncan Simester 10

11.  Aims & Justification ◦ To see whether people were more willing to pay more when using a credit card (credit card premium). ◦ Investigate generalisability of Feinberg (1986)’s results. ◦ Investigate influence of knowing the market price and credit card stimuli. Feinberg, R. A., (1986). Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation. Journal of Consumer Research,12, 384 - 356. 11

12.  Specific Aim  Investigate Willingness-to-Pay.  Methods  A volunteer sample are randomly allocated to cash or card condition  Second-price sealed-bid auction for a selection of goods 12

13. Results The credit card condition wrote down significantly higher values for all three prizes than the cash condition. 13 Buying Price (£) Prizes

14.  Specific Aims  Investigate necessary conditions to support credit card premiums.  Investigate whether consumers adjusting valuations from anchoring points is a valid explanation.  Method  Participants selected by an opportunity sample where randomly assigned to one of four groups, credit card / cash condition and letters & digits / type of card  Invited to buy a dinner certificate  Becker De-Groot ‘incentive –compatible’ procedure 14

15.  Results Conflicting findings with study one. Willingness to pay higher in congruent conditions than in incongruent conditions. Main effects of payment method and identification method not significant. 15 Buying Price (£) Identification Method Non-exposure Exposure

16.  General discussion  Authors suggest that there is no evidence that exposure to credit card logo increases willingness-to-pay  Authors suggest that congruence is more important  Authors suggest liquidity constraints (access to cash) does not explain the credit card premium.  Authors suggest that customers adjust their valuations from different anchoring points in the cash/credit card conditions. 16

17.  Relevance  Has been looked at since 1970’s  Used real money transactions therefore more generalisable  High value goods as usually use credit card for this purpose  Current issue - economic crisis  Further Research  Shimp and Moody (2000)  Lie et al. (2010) Lie, C., Hunt, M., Peters, H.L., Veliu, B., & Harper, D. (2010). The “Negative” Credit Card Effect: Cr edit Cards As Spending - Limiting Stimuli In New Zealand. The Psychological Record, 60, 399 – 412 Shimp, T. A., & Moody, M.P., (2000). In Search of a Theoretical Explanation for the Credit Card Effect. Journal of Business Research, 48, 17 – 23. 17

18. Misery is not Miserly… Always Leave Home Without It…  Overall we consider this a good study with good relevance, but there was a methodological flaw with the self-focused essay.  Does have clinical implications which are useful for real world applications.  In our opinion this paper is overcomplicated and it contradicts itself between the first and second experiment.  However does introduce a new methodology and so does contribute to future research. 18

19. Black, D.W., Repertinger, S., Gaffney, G.R. & Gabel, J. (1998). Family History and Psychiatric Comorbidity in Person with Compulsive Buying: Preliminary Findings. American Journal of Psychiatry, 155:960-963. Becker, M. G., DeGroot M.H., & Marschak, J. (1964). Measuring Utility by a Single-response Sequential Method. Behavioural Science, 9, 226 - 232. Capra, C.M., Lanier, K.F. & Meer, S. (2010). The effects of induced mood on bidding in random nth price auctions. Journal of Economic Behaviour & Organisation, 75:223-234 Clark, M.S., & Isen, A.M. (1982). Towards understanding the relationship between feeling states and social behavior. In A.H. Hastorf & A.M. Isen (Eds.), Cognitive social psychology.73 - 108. Amsterdam: Elsevier/North-Holland. Cryder, C.E., Lerner, J.S., Gross, J.J., & Dahl, R.E. (2008). Misery is not miserly: sad and self- focused individuals spend more. Psychological Science, 19, 6, 525 - 30. Feinberg, R. A., (1986). Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation. Journal ofConsumer Research,12, 384 - 356. 19

20. Garg, N., & Lerner, J. (2006). Emotion effects on compensatory consumption. Unpublished manuscript, The University of Mississippi, Oxford. James, W. (1890). Principles of psychology. New York: Holt. Lie, C., Hunt, M., Peters, H.L., Veliu, B., & Harper, D. (2010). The “Negative” Credit Card Effect: Credit Cards As Spending - Limiting Stimuli In New Zealand. The Psychological Record, 60, 399 – 412. Lynn, M. (2006b). Tipping in restaurants and around the globe: An interdisciplinary review. In M.Altman (Ed.), Handbook of contemporary behavioural economics: Foundations and developments, 626 - 643. Armonk, NY: M. E. Sharpe. Prelec, D., & Simester, D. (2001). Always Leave Home Without It. A Further Investigation of the Credit-Card Effect on Willingness to Pay. Marketing Letters, 12, 1, 5 - 12. Shimp, T. A., & Moody, M.P., (2000). In Search of a Theoretical Explanation for the Credit Card Effect. Journal of Business Research, 48, 17 – 23. 20