EXPRESS: Popping the Positive Illusion of Financial Responsibility Can Increase Personal Savings: Applications in Emerging and Western Markets

People around the world are not saving enough money. We propose that one reason people under-save is because they hold the positive illusion of being financially responsible. If this conjecture is correct, then deflating this inflated self-view may increase saving, as people should become motivated to restore perceptions of financial responsibility. After establishing that people do hold the illusion of financial responsibility, we developed an intervention that combats this self-enhancing bias by triggering people to recognize their frequent engagement in superfluous spending. This superfluous-spender intervention increased saving by enhancing people’s motivation to restore their diminished perceptions of financial responsibility. Consistent with theorizing, the intervention increased saving only when superfluous spending was under one’s control and among those who were motivated to perceive themselves as financially responsible. In addition to increasing saving in Western countries, the superfluous-spender intervention increased saving of earned income and a financial windfall over time amongst chronically poor coffee growers in rural Uganda. Collectively, this work shows that people view their financial responsibility through rose-colored glasses which, in turn, can undermine their financial well-being. It also endows stakeholders with a simple, practical, and inexpensive intervention that offsets this bias to increase personal savings.

More or less? The effects of financial constraints on variety-seeking behavior

PurposeIn daily life, consumers usually experience economic limitations on their consumption, which in turn results in experiencing financial constraints. The purpose of this article is to examine how feeling financially constrained influences variety seeking in consumption.Design/methodology/approachThe authors conducted three experiments to test the proposed hypotheses by applying multiple methods of manipulation of financial constraints and different measures of variety seeking.FindingsThe authors found that feeling financially constrained increases consumers’ insecurity, which in turn decreases their variety-seeking behavior. Additionally, the authors noted that individuals’ positive illusion could moderate the aforementioned effect. The negative effect of financial constraints on variety seeking only existed among consumers with a low positive illusion.Practical implicationsThe findings in this article could help marketers attain a better understanding of consumers’ choices under financial constraints and could help retailers optimize their product lines and distribution.Originality/valueThis research marks the first attempt to examine the relationship between financial constraint and variety seeking. The findings make for a valuable addition to both the financial constraint and variety-seeking literature reviews. The research study also extends the literature on how insecurity and positive illusion influence individuals’ decisions in the consumption context.

Subjective life quality, psychological well-being and attitude to the time perspective as well as age among pensioners leading different lifestyles

The article deals with the subjective assessment peculiarities of psychological and physical health components as indicators of life quality in correlation with psychological well-being, time perspective and subjective age in the late ontogenesis stage (58–93 years). The analysis of general patterns was carried out by age groups: 58–64, 65–74 and 75–93 years old, as well as lifestyle: elderly non-working people who receive home-based social services and elderly non-working people which lead an active lifestyle. It is shown that subjective indicators of life quality are at a rather low level and they decrease with age. However, the level of overall psychological well-being and its components correspond to a high and medium interval. The prevailing time orientations are “Positive past” and “Future” (the nearest time perspective); a balanced time perspective was found in a third of respondents. In assessing subjective age, there is a positive illusion which consists of perceiving oneself as being younger than the chronological age. An active lifestyle contributes to maintaining higher assessments of life quality level, orientation towards the future and a positive illusion of assessing subjective age. It is observed that people living with relatives or a caregiver, in comparison with those living alone, have a higher level of life quality and higher scores on the “Positive relationships with others” indicator of “Psychological well-being scale”. The period of 64–75 years is characterized by higher indicators of life quality, psychological well-being and the predominance of a balanced time perspective. Among the studied factors, psychological well-being is most closely correlated with the self-assessment of health (physical and psychological components). The time perspective is more correlated with the psychological component of health, while the subjective age is associated with the physical component. At the same time, there is a group specificity in the number and nature of correlations, depending on age and lifestyle, which indicates the role of subjective and objective factors in psychological well-being.

Determinants of overconfidence bias in Indian stock market

Purpose The purpose of this paper is to conduct an exploratory analysis of the demographic factors and investors’ characteristics, which cause changes in the extent of overconfidence level and its constituents among the individuals. Design/methodology/approach A survey has been conducted to explore the determinants of overconfidence and its constituents with the help of a well-structured close-ended questionnaire. The four constituents of overconfidence considered for the study are “better than average effect,” “planning fallacy,” “self-attribution” and “positive illusion.” The collected data are analyzed with the help of t-test, ANOVA and standard ordinary least square regression. Findings The results show that those who earn high, have more dependents, share the earning responsibility, have high investment frequency, less time horizon and more investment experience and invest in large cap stocks are more subject to the overconfidence. The study also concludes that gender, age and general education do not affect the level of overconfidence. Research limitations/implications The results of the study are useful for the market regulators, financial educators, stock market advisors and individual investors in avoiding costly investment mistakes, especially when transiting from one category of demographic and investment characteristics to another category of demographic and investment characteristics. Originality/value The study is unique in itself, as it contributes an instrument to quantify the level of overconfidence among the individual investors. Moreover, the study attempts to explore the impact of all demographic and investment characteristics in one go, which makes it a valuable contribution in the existing literature.

The Illusion of Moral Superiority

Most people strongly believe they are just, virtuous, and moral; yet regard the average person as distinctly less so. This invites accusations of irrationality in moral judgment and perception—but direct evidence of irrationality is absent. Here, we quantify this irrationality and compare it against the irrationality in other domains of positive self-evaluation. Participants ( N = 270) judged themselves and the average person on traits reflecting the core dimensions of social perception: morality, agency, and sociability. Adapting new methods, we reveal that virtually all individuals irrationally inflated their moral qualities, and the absolute and relative magnitude of this irrationality was greater than that in the other domains of positive self-evaluation. Inconsistent with prevailing theories of overly positive self-belief, irrational moral superiority was not associated with self-esteem. Taken together, these findings suggest that moral superiority is a uniquely strong and prevalent form of “positive illusion,” but the underlying function remains unknown.

Lay perceptions of health and environmental inequalities and their associations to mental health

Health inequalities are very well documented in epidemiological research: rich people live longer and have fewer diseases than poor people. Recently, a growing amount of evidence from environmental sciences confirms that poor people are also more exposed to pollution and other environmental threats. However, research in the social sciences has shown a broad lack of awareness about health inequalities. In this paper, based on data collected in Portugal, we will analyze the consciousness of both health and environmental injustices and test one hypothesis for this social blindness. The results show, even more clearly than before, that public opinion tends to see rich and poor people as being equally susceptible to health and environmental events. Furthermore, those who have this equal view of the world present lower levels of depression and anxiety. Following cognitive adaptation theory, this “belief in an equal world” can be interpreted as a protective positive illusion about social justice, particularly relevant in one of the most unequal countries in Europe.

Sex and Gender as Factors in in Romantic Partnerships and Best Friendships

For the majority of people, two key non-kin figures form part of the central support clique that resides at the centre of their social network. These are the best friend and the romantic partner, and both play distinct roles which are of benefit to the individual concerned. However, while the romantic partner will always have been chosen in the context of the mating market, we do not know whether the selection of a best friend occurs within a similar market of competition and assessment. This study used real self-rated attribute data for participants and their best friends and romantic partners to explore: (1) whether best friendships operate within a mating market; (2) whether, once established, they show evidence for positive illusion, projection or competition; and (3) whether assortative mating is present. Further, we considered whether the sex of the best friend relative to the participant influences these results. We found that same-sex best friends have an acknowledged role linked to social connectedness and behaviour, that for same-sex best friends both male and female participants show evidence for homophily or projection rather than mate competition, that neither male nor female participants appear to view cross-sex best friends as potential mates, and that the evidence for ‘assortative mating’ is stronger within best friendships than romantic partnerships regardless of best friend sex. Our results imply that despite a culture of commitment and monogamy, male participants display behaviours within their romantic partnerships which suggest they are still active within the mating market. In contrast, for both sexes the best friendship is unaffected by the mating market and the stability and contentment that characterises best friendships is underpinned by a degree of similarity stronger than that within the romantic partnership.