IDEAS home Printed from https://ideas.repec.org/a/kap/mktlet/v26y2015i4p501-512.html
   My bibliography  Save this article

I will risk a stranger’s money, but not my own or my friend’s money: Effect of proximity of the money source to the self on financial risk-taking

Author

Listed:
  • Rebecca Trump

    ()

  • Stacey Finkelstein
  • Paul Connell

Abstract

This research examines the effect of perceived closeness to a source of money on people’s likelihood to take financial risks. Across two experiments using gambling decision scenarios, we find that people make riskier choices when the monetary cost of the decision is high (vs. low) and when they perceive the source of the money as distant from (vs. close to) the self. Study 1 demonstrates that people make riskier decisions when someone else is paying than when they are paying, but only when the monetary cost of the gamble is relatively high (vs. low). Study 2 demonstrates that people make riskier decisions with a distant (vs. close) other’s money, presumably because they perceive a close (distant) other’s resources as similar to (different from) their own resources. The findings support the notion that the source of money affects how people mentally account for it, with proximity to the self as a determining factor. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Rebecca Trump & Stacey Finkelstein & Paul Connell, 2015. "I will risk a stranger’s money, but not my own or my friend’s money: Effect of proximity of the money source to the self on financial risk-taking," Marketing Letters, Springer, vol. 26(4), pages 501-512, December.
  • Handle: RePEc:kap:mktlet:v:26:y:2015:i:4:p:501-512
    DOI: 10.1007/s11002-014-9280-7
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11002-014-9280-7
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Manoj Thomas & Kalpesh Kaushik Desai & Satheeshkumar Seenivasan, 2011. "How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices," Journal of Consumer Research, Oxford University Press, vol. 38(1), pages 126-139.
    2. Rod Duclos & Echo Wen Wan & Yuwei Jiang, 2013. "Show Me the Honey! Effects of Social Exclusion on Financial Risk-Taking," Journal of Consumer Research, Oxford University Press, vol. 40(1), pages 122-135.
    3. Sujoy Chakravarty & Glenn W. Harrison & Ernan E. Haruvy & E. Elisabet Rutström, 2011. "Are You Risk Averse over Other People's Money?," Southern Economic Journal, Southern Economic Association, vol. 77(4), pages 901-913, April.
    4. Mandel, Naomi, 2003. " Shifting Selves and Decision Making: The Effects of Self-Construal Priming on Consumer Risk-Taking," Journal of Consumer Research, Oxford University Press, vol. 30(1), pages 30-40, June.
    5. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
    6. Ratner, Rebecca K & Kahn, Barbara E, 2002. " The Impact of Private versus Public Consumption on Variety-Seeking Behavior," Journal of Consumer Research, Oxford University Press, vol. 29(2), pages 246-257, September.
    7. Scott I. Rick & Cynthia E. Cryder & George Loewenstein, 2008. "Tightwads and Spendthrifts," Journal of Consumer Research, Oxford University Press, vol. 34(6), pages 767-782, October.
    8. McGraw, A Peter & Tetlock, Philip E & Kristel, Orie V, 2003. " The Limits of Fungibility: Relational Schemata and the Value of Things," Journal of Consumer Research, Oxford University Press, vol. 30(2), pages 219-229, September.
    9. Elke U. Weber & Christopher Hsee, 1998. "Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk," Management Science, INFORMS, vol. 44(9), pages 1205-1217, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:iburev:v:26:y:2017:i:6:p:1023-1033 is not listed on IDEAS
    2. repec:eee:soceco:v:69:y:2017:i:c:p:92-98 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:mktlet:v:26:y:2015:i:4:p:501-512. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.