**Abstracts listed below. Please email avni.shah@utoronto.ca for a recent copy of any working papers. **

Publications & Invited Revisions

Shah, Avni M. & George Wolford. (2007). “Buying Behavior as a Function of Parametric Variation in Number of Choices,” Psychological Science 18 (5): 369-370. (Lead Article) [PDF]

Shah, Avni M., James R. Bettman, Peter A. Ubel, Punam Anand Keller & Julie A. Edell (2014). “Surcharges Plus Unhealthy Labels Reduce Demand for Unhealthy Menu Items,” Journal of Marketing Research 51 (December), 773-789. [PDF]

Shah, Avni M., Noah Eisenkraft, James R. Bettman & Tanya L. Chartrand (2016), “‘Paper or Plastic’: How We Pay Influences Post-transaction Connection,” Journal of Consumer Research 42 (February), 688-708. [PDF]

Shah, Avni M., James R. Bettman & John Payne (2015), “How the Pain of Payment Can Magnify and Mitigate Choice Overload Effects,” Invited for resubmission at Marketing Science.

Working Papers

McCartney, W. Benedict & Avni M. Shah“‘I’ll Have What She’s Having’: Identifying Social Influence in Household Mortgage Decisions.”[SSRN]

Shah, Avni M., Matthew Osborne, Dilip Soman, Jaclyn Lefkowitz, Andrew Fertig & Nina Mažar. “Can Making Family Salient Increase Retirement Contributions?: Evidence from Field Experiments in Mexico.”

Shah, Avni M., James R. Bettman, Tanya L. Chartrand, Noah C. Eiskenkraft & Kathleen D. Vohs. “‘It Can Bring Us Closer and Tear Us Apart:’ How the Pain of Payment Affects Interpersonal Rapport and Commitment.”

Addoum, Jawad,* Howard Kung* & Avni M. Shah.* Money and (Bargaining) Power: Increasing the Relative Pain of Payment of an Individual Influences Asset Allocation Decisions Within a Household,” (*Equal Authorship, authorship listed alphabetically).

Samper, Adriana, Avni M. Shah, James R. Bettman & Gavan J. Fitzsimons. “Rolling the Dice with Premium Products: Using a High End Product Polarizes Self-Perceptions of Performance.”

Shah, Avni M., James R. Bettman & John Payne. “How the Pain of Payment Influences Loss Aversion.”

Abstracts for Publications & Invited Revisions

Shah, Avni M. & George Wolford. (2007). “Buying Behavior as a Function of Parametric Variation in Number of Choices,” Psychological Science 18 (5): 369-370. (Lead Article) [PDF]

We were interested in exploring the relationship between an increasing number of alternatives and purchase likelihood. On one hand, as the number of choices increases, consumers are more likely to find an item that meets their needs.  On the other hand, there is accumulating evidence that having many options from which to choose may be counterproductive (e.g., Iyengar & Lepper 2000; Schwartz 2004).  However, most previous research on this topic compared only two set size for number of choices: a medium value, such as 6, and a large value, such as 24.  We were interested in exploring the influence of number of choices in a more parametric fashion.  Using a natural field experiment, we measured the proportion of individuals who purchased a pen from a set of alternatives, varying the number of options from 2 to 20 in increments of 2.  We find that buying behavior was a curvilinear function of number of choice, peaking at a value of 10 pens.  We demonstrate  that more choice does not always lead to less buying.  Rather, it is only after the optimal point has been exceeded that more choice results in less buying.

Shah, Avni M., James R. Bettman, Peter A. Ubel, Punam Anand Keller & Julie A. Edell (2014). “Surcharges Plus Unhealthy Labels Reduce Demand for Unhealthy Menu Items,” Journal of Marketing Research 51 (December), 773-789. [PDF]

Three laboratory experiments and a field experiment in a restaurant demonstrate that neither a price surcharge nor an unhealthy label are enough on their own to curtail the demand for unhealthy food.  However, when combined as an unhealthy label surcharge, they reduce demand for unhealthy food.  We also show that the unhealthy label is equally effective for women as the unhealthy label surcharge but backfires for men, who order more unhealthy food when there is an unhealthy label alone.  We demonstrate that an unhealthy surcharge, which highlights both the financial disincentive and potential health costs, can significantly drive healthier consumption choices.  From a policy and government perspective, if the goal is to reduce demand for unhealthy food, increasing the transparency of the health rationale for any financial disincentive is a necessity in order to effectively lower unhealthy food consumption.

Shah, Avni M., Noah Eisenkraft, James R. Bettman & Tanya L. Chartrand (2016), “‘Paper or Plastic’: How We Pay Influences Post-transaction Connection,” Journal of Consumer Research 42 (February), 688-708. [PDF]

Can the way that individuals choose to pay influence the amount of commitment and value individuals experience after the purchase has occurred?  Across archival data from an alumni association, field and lab experiments, this article examines how commitment and value are influenced by payment form. Using archival donation data from a university’s alumni association, I find that paying by check in year t increases the likelihood to donate in the following year (year t +1) by 9.9% in comparison to those paying by card (i.e., 62.3% versus 56.7%).  We determine causality more precisely in a controlled field and laboratory experiment, holding payment amount constant. Individuals who pay using a more painful form of payment are more committed and loyal to their organization, value and increase their emotional attachment to an object, decrease their commitment to non-chosen alternatives, and are more likely to publicly signal their commitment in comparison to those who pay by less painful forms of payment.  The pain of payment mediates the effect of payment form on commitment and value.

Shah, Avni M., James R. Bettman & John Payne (2015), “How the Pain of Payment Can Magnify and Mitigate Choice Overload Effects,” Invited Revision at Marketing Science. 

Prior research has demonstrated that under some conditions buying initially increases and then decreases as the number of alternatives increases, resulting in an inverted U-shape function (the so called “choice overload effect”).  Previous work has attributed the choice overload effect to the cognitive and affective costs associated with an increasing number of alternatives.  However, this would imply that choosing a product among a set of similar alternatives all priced at $0.25 would produce the same effect as if the same products among a consideration set were all priced at $2.00.  We argue that the pain of payment can alter the relationship between an increasing choice set and purchase likelihood.  In two experiments we use real choices with real costs and a minimum of three different numbers of alternatives, manipulating pain of payment via price and by payment form (i.e., cash versus debit card).  We demonstrate that an inverted U-shaped function can be reliably magnified (mitigated) as a function of increasing (decreasing) the pain of payment. Thus, increasing choice set size alone does not produce choice overload effects in all conditions.  Rather, it is the combination of the psychological pain of payment and size of the choice set that can lead to or diminish the choice overload effect.

Abstracts for Working Papers

McCartney, W. Benedict & Avni M. Shah“‘I’ll Have What She’s Having’: Identifying Social Influence in Household Mortgage Decisions.”[SSRN]

We investigate whether household mortgage choices are influenced by social interaction. We build a database using household mortgage data and precisely geolocated real estate data and ask whether households are socially influenced by those with whom they are more likely to interact. Specifically, we test if households are especially affected by their hyperlocal peers (i.e., neighbors who live on the same census block) over and above their neighborhood peers (i.e., neighbors living on the same or adjacent census blocks). We find that households are 1.5% (9.8%) more likely to choose an adjustable rate mortgage (refinance) if the share of their block-peers with an adjustable rate mortgage (who have recently refinanced) increases by ten percentage points. Consistent with a social interactions mechanism, people new to their census block (i.e., purchase loans) show no effects from social influence while those who have had time to socially interact with their neighbors (i.e., refinance loans) do. Furthermore, households who move to a new neighborhood and later refinance their loan (i.e., movers) become more socially influenced over time. Finally, non-occupant owners’ decisions about their second and third properties are never influenced by the households that live around the property but are influenced by the neighbors at their primary residence. We complement these empirical strategies in the lab by experimentally assigning peers and peer decisions in a variety of ways to demonstrate the robustness of these findings.

Shah, Avni M., Matthew Osborne, Dilip Soman, Jaclyn Lefkowitz, Andrew Fertig & Nina Mažar. “Can Making Family Salient Increase Retirement Contributions?: Evidence from Field Experiments in Mexico.”

Despite good intentions, consumers regularly struggle to reach their retirement savings goals. There are small barriers and obstacles that prevent individuals from forgoing consumption today in order to secure a better financial pathway for the future. While this is a persistent and pervasive issue all over the world, the urge to improve low retirement contribution rates has become a major policy issue in Mexico. Current data show that: only 0.3% of the 19 million active pension account holders make a contribution in a given year (CONSAR 2015). Interviews with several Mexican citizens revealed that in some cases individuals seem to prefer maximizing their family’s well-being today over and above their own personal well-being in the future. Could representing the contribution decision as one that would help provide financial security for one’s family in the future (rather than highlighting the benefits to one’s own well-being) increase the likelihood that individuals will make a contribution, even as compared to other nudges? Three large-scale field experiments (N=224,815) demonstrate that framing retirement contributions as money for securing future financial stability for one’s family significantly improves contribution rates by 34% as compared to the control, both at the time the nudge is received, and even over a six-month period.

Shah, Avni M., James R. Bettman, Tanya L. Chartrand, Noah C. Eiskenkraft & Kathleen D. Vohs, “‘It Can Bring Us Closer and Tear Us Apart:’ How the Pain of Payment Affects Interpersonal Rapport and Commitment.” 

We examine the effect of pain of payment on interpersonal rapport and commitment.  We argue that paying with a more painful form during a transaction increases interpersonal affiliation, measured both implicitly through physical distance and explicitly via collaboration on a task and ratings of affiliation post-task.  However, we argue that this is a different process for spenders who directly experience the pain of payment, and recipients, who are the beneficiary of the pain of payment.  For the spender, we hypothesize that individuals use the pain of payment as a cue of how much they like the other person, increasing their affiliation.  For the recipient, we hypothesize that the pain serves as a cue of how much pain the other person went through for them, increasing the recipient’s feelings of reciprocity, subsequently increasing affiliation.  We argue that this occurs only when individuals have the goal to collaborate.  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 where the goal is more self-focused.

Addoum, Jawad,* Howard Kung* & Avni M. Shah,* Money and (Bargaining) Power: Increasing the Relative Pain of Payment of an Individual Influences Asset Allocation Decisions Within a Household,” (*Equal Authorship, authorship listed alphabetically).

We examine the effect of intra-household bargaining on household portfolio choice. Theoretically, intra-household bargaining is an important determinant of observed household portfolio choice when members of a couple have differing risk aversions. Empirical testssupport the theory. We find that shocks to the distribution of intra-household bargainingpower, or in other words, altering the relative pain of payment for each individual in the household, leads to significant asset allocation shifts between risky and comparativelysafer asset classes in households’ portfolios. Our results are robust to alternative risky asset definitions, including investments in stocks, real estate, and holdings in private business,as well as to alternative control specifications. Economically, the effect of intra-household bargaining is large in magnitude, with bargaining-related effects driving within-household variation representing more than 46% of the mean allocation to equities in households’ financial portfolios.

Samper, Adriana, Avni M. Shah, James R. Bettman & Gavan J. Fitzsimons, “Rolling the Dice with Premium Products: Using a High End Product Polarizes Self-Perceptions of Performance.”

Could the suit that you wore to a job interview influence how you think you did?  Across four studies, we examine how the use of high (vs. low) end products interacts with task-relevant outcomes to shape self-perceptions of performance.  We find that using a high end product in a goal-relevant task (Armani suit for a job interview, Odyssey golf club for a golfing putt) can improve self-perceptions of performance following success, yet worsen self-perceptions following failure.  Mediation analyses reveal that the choice of a high end product elicits greater performance expectations, which people subsequently assimilate toward following success, yet contrast against following failure.

Shah, Avni M., James R. Bettman & John Payne, “How the Pain of Payment Influences Loss Aversion.”

Casino revenues in Nevada alone exceeded $10.8 billion for 2012, up 1.5% from 2011, and continue to grow (Nevada Gaming Control Board, 2013).  Casinos regularly require patrons to use poker chips or casino tokens instead of cash.  Furthermore, as consumers are moving towards payment forms such as debit/credit cards and even mobile payment technologies (which all are less psychologically painful forms of payment relative to cash), an important question emerges:  Can the form of money lead individuals to be less sensitive to losses and more focused on gains?  Across two studies we show that reducing the pain of payment increases the amount of money gambled, propensity of selecting riskier gambles (<40% chance of winning), and increases recall errors, with individuals underestimating the amount gambled and overestimating earnings.  We demonstrate that loss aversion can decrease and even reverse when the pain of payment is attenuated.  These findings indicate that the cognitive and affective components associated with risk can be influenced by the pain of payment.