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Research seminar Why Abundance Increases Consumers’ Aversion to Credit Cards

2017-05-18
ISM kindly invites to participate in Research Seminar Regaining Control By Ditching the Plastic: Why Abundance Increases Consumers’ Aversion to Credit Cards Under Conditions of Low Control by Daniel Brannon, PhD,  Assistant Professor at the University of Northern Colorado, USA
 
Seminar will take place on the 18th of May, 14:00, room 407.
 

Abstract:

What drives upper and middle income consumers to end their love affair with plastic in times of trouble? A recent report released by the Federal Reserve revealed a fascinating consumer trend following the 2007 recession. The report showed that, between 2007 and 2009, consumers shed credit cards and decreased debt by 7.8%. Surprisingly, this trend was most pronounced among upper-middle income consumers. Among lower income consumers, the report found no changes in credit card usage. We ask how threats to consumers’ control caused by such events influences the way they pay for products and services. When personal control is threatened, consumers experience discomfort and seek to restore control (Cutright 2012; Kay et al. 2008). One way to restore control is through effortful tasks (Olivola and Shafir 2013). Consistent with this notion, consumers avoid low effort products when they experience low control (Cutright and Samper 2014). In this research, we propose that perceptions of effort associated with the way that consumers pay for products and services also influence preferences under low control. Specifically, we propose that because credit cards are perceived as a painless, low effort way to make a purchase (Prelec and Loewenstein 1998), consumers will have a decreased preference to use them under conditions of low (vs. high) control. Further, we predict that this behavior will only occur among consumers with abundant (vs. scarce) financial resources, as consumers with scarce resources are more debt-averse (Callender and Jackson 2005) and less likely to view credit cards payments as painless or low effort. Finally, we predict that our results will be mediated by feelings of empowerment associated with the payment. Specifically, among consumers with abundant (vs. scarce) resources, low pain of payment associated with using a credit card should decrease feelings of empowerment associated with making a purchase under low control.

Speaker bio:

Daniel Brannon, PhD is an Assistant Professor at the University of Northern Colorado. He received his MBA from Arizona State University in 2011 and his PhD in Marketing from Arizona State in 2016. His research area of interest is in consumer behavior, specifically in the areas of consumer identity, word-of-mouth, and compensatory consumption. He teaches courses in consumer behavior, consumer research, and services marketing. His work has been published in the Journals Appetite and Advances in Consumer Research.  He has 6 years of experience working in the private sector in various business-to-business roles for a large U.S. aerospace company.

Please register online in advance here>>>.