Michel Tuan Pham
Promotion and Prevention Across Mental Accounts: How Financial Products Dictate Consumers' Investment Goals
Coauthor(s): Rongrong Zhou.
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We propose that consumers' investment decisions involve processes of promotion and prevention self-regulation that are managed across separate mental accounts, with different financial products seen as representative of promotion versus prevention. Consistent with this
general hypothesis, four experiments among over 800 adult consumers show that (a) investors are differentially sensitive to potential gains versus potential losses depending on the financial products they evaluate; (b) investors are differentially risk-seeking with money mentally associated with different financial accounts; (c) the mere evaluation of different financial products is enough to activate distinct promotion versus prevention orientations that carry over to
totally unrelated judgments; and (d) the priming of promotion versus prevention orientations steers consumers' decisions toward financial products that are consistent with these orientations.
These results reveal that investors' goals may be determined by the investment opportunities under evaluation, rather than being independent of these opportunities as is assumed in standard
Source: Journal of Consumer Research
Zhou, Rongrong, and Michel Tuan Pham. "Promotion and Prevention Across Mental Accounts: How Financial Products Dictate Consumers' Investment Goals." Journal of Consumer Research 31, no. 2 (June 2004): 12-35.