What’s Pain Got to Do With It?: How the Pain of Payment Influences Our Choices and Relationships

Co-Chairs: James R. Bettman and Tanya L. Chartrand

Committee: Mary Frances Luce, Julie A. Edell, and Noah Eisenkraft

One of the most interesting aspects of the psychology of money is the pain of paying.  Most purchase contexts involve the tradeoff of giving up or parting with money in order to receive a particular item or good.  Prior research has demonstrated that the psychological pain associated with payment and parting with money can vary not only as a function of the objective amount, but also can vary based on payment form (e.g., cash versus debit card), even when the amount is held constant.  My dissertation examines how the pain of payment can serve as a signal of value, impacting consumer decision-making at the time of purchase and post-transaction through the relationships individuals have with products, organizations, and even interpersonally.  Across all three essays, I use a variety of methodological approaches to study the research questions at hand.

ESSAY 1: How the Pain of Payment Can Magnify and Mitigate Choice Overload Effects

*Invited for resubmission at Marketing Science, Co-authors: Jim Bettman & John Payne

In Essay 1, I examine whether the pain of payment can influence how we evaluate a consideration set as a whole.  While there are many ways to look at how consideration sets are evaluated, one compelling way is investigating whether the pain of payment can alter choice overload.  Research has demonstrated that as the number of available alternatives increases, buying initially increases and then decreases, resulting in an inverted U-shape function.  As the affective and cognitive costs increase, individuals do not feel as compelled to make any choice at all and many do nothing (i.e., make no purchase).  Could the pain of paying affect whether an individual makes a choice?   In two experiments using real choices with real costs and a minimum of three different numbers of alternatives, I demonstrate that an inverted U-shaped function can be reliably obtained under some conditions.  In particular, I demonstrate that manipulating pain of paying systematically moderates choice overload.  Increasing choice set size alone does not produce choice overload effects in all conditions.  In particular choice overload is less likely to occur for a larger set of alternatives if the pain of payment is lower (e.g., if payment is via debit card versus cash).

ESSAY 2: ‘Paper or Plastic’: How We Pay Influences Post-transaction Connection 

*Forthcoming at the Journal of Consumer Research, Co-authors: Noah Eisenkraft, Jim Bettman & Tanya Chartrand

Can the pain of payment influence product and brand commitment after the purchase has occurred?  In Essay 2, I examine how the pain of payment influences the affective reaction to the chosen option post-purchase.  I argue that when individuals pay using a more painful form of payment, they compensate and justify the pain by imbuing their chosen alternative with more value and are more committed to their purchase post-transaction.  Using archival donation data from a university’s alumni association, a controlled field experiment, and a laboratory experiment where participants spend money that is not even their own (i.e., choosing where to donate someone else’s money), I find that experiencing more pain of payment increases commitment and loyalty, emotional attachment to the product, and increases the probability of publicly signaling their commitment.

ESSAY 3: ‘It Can Bring Us Closer and Tear Us Apart:’ How the Pain of Payment Affects Interpersonal Rapport and Commitment 

*Working paper, manuscript in progress for submission; Co-authors: Jim Bettman, Tanya Chartrand, Noah Eisenkraft, Kathleen Vohs

In Essay 3, I ask whether experiencing more pain of payment during a transaction, where one person spends money on him/herself and another person, influences feelings of interpersonal commitment.  I argue that paying with a more painful form during a transaction will increase interpersonal affiliation, measured both implicitly through physical distance and explicitly through collaboration on a task and explicit measures of affiliation.  For the spender, I hypothesize that individuals will use the pain of payment as a cue of how much they like the other person, increasing their affiliation.  For the recipient, I hypothesize that the pain will serve as a cue of how much pain the other person went through for them, increasing the recipient’s feelings of reciprocity, and thus increasing their affiliation.  However, I also pose a boundary condition.  I argue that this effect will only hold in settings where the two individuals have the goal to collaborate.  Experiencing more pain of payment will decrease affiliation, particularly for the spender, in settings where the goal is more competitive and self-oriented.  Findings from two quasi-field experiments and one hypothetical scenario support these hypotheses demonstrating that experiencing more pain of payment can increase interpersonal affiliation in collaborative settings but can decrease affiliation, particularly for the spender, in competitive settings.