Retail Therapy is Real

As the holiday shopping season begins, research finds people who are sad are willing to forgo future monetary benefits in exchange for instant financial gratification

RIVERSIDE, Calif. ( — People who are sad are willing to forgo greater future monetary gains in exchange for instant financial gratification, according to findings in a just-published paper co-authored by an assistant professor at the University of California Riverside’s School of Business Administration.

“Our work clearly shows that the desire for retail therapy is real,” said Ye Li, an assistant professor of management.

Ye Li

Ye Li, an assistant professor of management

Li co-authored the paper, “The Financial Costs of Sadness,” which was published online Tuesday, Nov. 13 in the journal Psychological Science, with Jennifer S. Lerner, of Harvard University, and Elke U. Weber, of Columbia University.

The researchers set up three experiments and found sad participants, compared to participants in a neutral mood, were 13 to 34 percent less likely to value monetary awards delayed three months. These results are the first evidence that sadness triggers an implicit goal to obtain rewards as soon as possible – even when such urgency comes at financial cost.

The research has implications in public policy. For example, a person who is sad after the death of a family member may exacerbate their financial hardship by making choices that favor immediate consumption. And while the U.S. Federal Trade Commission has a “cooling-off rule,” giving people three days to cancel a sale, the rule excludes sales of real estate, insurance and securities – the sorts of sales one might engage in after the death of a family member, loss of employment or a natural disaster.

The paper outlines three experiments the researchers set up to test their “myopic-misery hypothesis,” which reasons that sadness increases impatience and creates a focus on obtaining money immediately. That contrasts with the sadder but wiser hypothesis, which reasons that sadness makes people wiser and more likely to think through the financial implications of different options, therefore decreasing impatience.

All of the experiments confirmed the myopic-misery hypothesis.

* In the first experiment, 202 participants were randomly assigned to groups of neutral-, sad-, and disgusted-state conditions. They then watched video clips and wrote essays to evoke either a neutral, sad or disgusted state. After that, they made 27 choices between receiving cash immediately versus larger amounts of cash in the future.

The researchers found the median sad participant required $37 immediately to forgo receiving $85 in three months, whereas the median neutral participant required $56 immediately. Disgusted participants required $59 immediately.

* Like the first experiment, the 189 participants in the second experiment were assigned to neutral, sad and disgusted groups and made to watch videos and write essays. However, they then had to make choices between receiving a $50 Amazon gift certificate or one worth more in the future. They did this 11 times, with gradually increasing dollar amounts. Before making those 11 choices, they also were asked to type what was going through their minds as they thought about the upcoming choice.

The researchers found that the median sad participant required only $65 immediately to forgo receiving $100 in three months, whereas the median neutral or disgusted participant required $74 immediately. Moreover, they identified a mechanism for how sadness affects impatience: Reasons for preferring the immediate reward came to mind sooner and more frequently when participants were sad as opposed to disgusted or neutral.

* In the third experiment, 203 participants were assigned to sad and neutral groups and made to watch videos and write essays. (The disgusted group was dropped this time.)They then made 42 choices between receiving smaller cash amounts earlier and slightly larger cash amounts later.

The researchers found that $100 was worth $4 less to the median sad participant if there was any delay receiving it. In contrast, median sad and neutral participants discounted already delayed rewards equally. Thus, sadness, compared with neutral emotion, increases desire to get something immediately, not just sooner.

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