The Psychology of Marginal Utility
Bibliographic Data
| ID | 2236978 |
|---|---|
| Authors | Xilin Li (0000-0003-1343-5962, corresponding author), Christopher K Hsee (0000-0002-8391-7847, corresponding author) |
| Editors | J Jeffrey Inman (0000-0003-0410-2242), Hilke Plassmann (0000-0001-9680-0763) |
| Year | 2021 |
| Volume | 48 |
| Issue | 1 |
| Pages | 169-188 |
| Publication date | 2021-06-29 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Consumer Research (JOURNAL) |
| Journal identifiers | ISSN: 0093-5301 • E-ISSN: 1537-5277 |
| Publisher | Oxford University Press (PUBLISHER • GB) |
| DOI | 10.1093/jcr/ucaa064 |
| OpenAlex | W3118977376 |
| Language | EN |
| Citations received | 7 |
| References cited | 41 |
That wealth has diminishing marginal utility is a fact of life, and that people be sensitive to their current level of wealth when deciding whether to pursue additional wealth is a requirement of rational choice. A series of experiments, spanning diverse contexts, reveal marginal-utility neglect-that people are rather insensitive to their current wealth when deciding how much effort to expend to acquire a monetary reward (e.g., how long to walk to claim a voucher). Moreover, the experiments demonstrate that a marginal-utility-prompting manipulation, which prompts people to consider their current wealth and their need for the reward given their current wealth, produces a significant sensitization effect-making financially richer (vs. less rich) individuals less (vs. more) willing to seek the reward. This manipulation is more effective than either prompting people to consider their current wealth alone or consider their need for the reward alone, suggesting that marginal-utility prompting does not merely draw people's attention to their current wealth or merely draw their attention to their need for the reward, but links the two elements. This research elucidates the psychology of marginal utility and yields implications beyond the pursuit of monetary rewards
Dynamic inconsistency · Economics · Expected utility hypothesis · Financial economics · Marginal cost · Marginal utility · Microeconomics · Neglect · Subjective expected utility · Decision-Making and Behavioral Economics · Experimental Behavioral Economics Studies · Psychology · Psychology of Moral and Emotional Judgment
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| Citations per year | 1.75 |
|---|---|
| Citation span | 2022 - 2026 (5) |
| Highly cited | No |