Word: effects
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According to a new study to be published in the Journal of Consumer Research, shoppers are less likely to spend their dough if they are carrying cash in large denominations. This so-called denomination effect can be a powerful predictor of consumer spending habits. Through a series of experiments, the study shows that if people have an equivalent amount of money, say $100, the folks with a Ben Franklin in their pockets might not part with it, while those carrying Andrew Jacksons and George Washingtons more easily give up the cash. (See the worst business deals...
What's driving the denomination effect? First off, some consumers see large bills as more sacrosanct than a bunch of chump change. "People tend to overvalue bigger bills," says Joydeep Srivastava, a marketing professor at the University of Maryland's Robert H. Smith School of Business and a co-author of the study. "There's a psychological cost associated with spending a $100 bill that's not there with spending smaller bills." We tend to isolate the cash in our minds. Each $20 is a separate, less valuable entity than that single $100 bill. So it's easier to part...
...catching" happiness from your friends. We are social beings, of course, and our outlook is influenced to no small degree by that of our friends and family. Dr. Nicholas Christakis, a professor at Harvard Medical School, documented in a 2008 study just how extensive and powerful this network effect is. Compared with glum people, those who were happy were more likely to be surrounded by other happy people - even the friends of happy people's friends' friends (who might be complete strangers) tended to be happy...
...kinds of ways to throw sand in the gears, and outside groups will start to mobilize," he warns. "My view is, we can get more than 60 votes." To do otherwise, he says, is to risk having the whole program come apart as it is being put in effect. "Once it becomes partisan," he warns, "the chance of success is diminished...
...potentially more damaging - specter looms: the return of protectionism. In a recent report, the World Bank found that although the G-20 nations pledged themselves to avoid protectionist measures when they met in Washington last November, no fewer than 17 of them have, since then, "implemented measures whose effect is to restrict trade at the expense of other countries...