What is... conspicuous consumption

When you shop, how much of what you buy is driven by need? How much by an urge to show off to friends and co-workers?
Spending money on extravagant items that display wealth or status is called “conspicuous consumption”. It is unclear why exactly we do this – particularly as it can be damaging to wealth and happiness – but there is some evidence that biology might play a part.



If we want to be happier, wealthier and less wasteful, a first step may be to understand the underlying motivations for why conspicuous consumption is so attractive to some and what can be done about it.

A century of “look at me”
Back in 1899, Thorstein Veblen wrote about conspicuous consumption in his book The Theory of the Leisure Class. Since then, it has traditionally been assumed that our own conspicuous spending behaviour – such as buying designer clothes or expensive cars – is driven primarily by the social environment around us, by cultural norms which motivate us to "keep up with the Joneses".

The animal kingdom does it, too 
However, recent research in evolutionary psychology and biology challenge these assumptions by arguing our innate biological desire to mate and reproduce influences spending behaviour. This evidence suggests there may be a “hard-wired” component to conspicuous consumption.
In the animal kingdom, for example, peacocks and other species engage in displays of resources which are crucial to their mating strategies. Similarly, humans buying flashy technology or fast cars may be signalling their sexual appeal through this consumption. Author Robert Frank writes in The Darwin Economy about a consumption “arms race”.

Putting it to the test 
Academic research has been investigating this biological link to conspicuous consumption. A team led by Jill Sundie, at the University of Texas at San Antonio, ran an experiment in which participants imagined they had received an unexpected windfall of $2,000. They were asked how much of this money they would like to spend on purchases which might convey their newfound wealth, such as designer watches or treating ten friends to a night out on the town.
Those taking part in the study were split into those put into a ‘mating frame of mind’, by looking at dating profiles of eight attractive (and single) fellow students, and those not put into this frame of mind, who instead looked at photos of campus dormitory buildings.
The study found men in a romantic frame of mind chose to spend significantly more of their wealth on conspicuous purchases. Women’s spending, on the other hand, was unaffected.
Of course, it’s not clear whether the men were “hard wired” by nature to spend more or if they are responding to social pressures. But it’s an interesting finding nonetheless.

When showing off goes wrong
Spending a little on things you like might not be a problem – but only up to a point. This study from the United States suggests people are getting into debt in response to pressure to buy items to increase or maintain social standing. This Swiss happiness research examines envy of luxury cars and concludes conspicuous consumption can be bad for our overall happiness.

Shop and think 
It remains difficult to say how much of our conspicuous consumption is driven by ancient evolutionary demands we aren't aware of, and how much by the social pressures of the modern age.
New research from evolutionary psychology helps us to put our behaviour in perspective and understand that it’s neither a moral failing nor inevitability. Knowing where our desires come from means we may be able to make the informed choice to alter what we do in the future.
One idea for the next time you go shopping for things you don’t need, is to think about what forces might be driving you. Weigh up what’s in your best interests.

(This post originally appeared on the Ezonomics website http://www.ezonomics.com/whatis/conspicuous_consumption)

What is... gamification

Why do teenagers seem so transfixed when they play the latest video game for hours on end? 
Chances are part of the motivation is the desire to clock up more points, move onto the next level, win badges and other elements common to many games. “Gamification” – a relatively new buzzword – is when these addictive aspects of gaming are applied to other parts of life.

Gamification can make activities more fun, social or engaging. But beware, as well as encouraging positive habits, it can also be used in less comfortable ways. And the “players” may not even be aware of it.

Game on
Games often involve points, levels and challenges – perhaps a leader board featuring the best of the best. These elements might offer a sense of success and progress as players work their way through.
Game mechanics don’t have to be complex and gamification can involve simply adding game elements to other areas of life. Anyone who has filled out a LinkedIn profile or a Google+ page will be familiar with the “progress bar”, a percentage-based indicator of how complete a profile is. Although it may not be obvious, a progress bar is actually a basic game mechanic. Users are motivated to invest more time and effort into their profiles simply to reach 100% completeness, the result being given the title of "All Star", a reward in status without which many users may not have bothered.

Pavlov’s dog was right
The term gamification was coined by British-born computer programmer and inventor Nick Pelling back in 2002, and despite it only gaining popularity in the last few years, the psychology behind it has been around for much longer.
Gamification comes down to basic rewards principles.
The classic example of Ivan Pavlov's experiments with dogs demonstrates how animals (humans included) are highly influenced by rewards and feedback mechanisms, often without being consciously aware of it.
American academics Geoffrey and Elizabeth Loftus describe in their classic and influential book Mind at Play: The Psychology of Video Games (published in 1983) how games have the potential to foster addictive behaviours because they use "uncertain schedules of reinforcement". Games reward and punish participants in unexpected ways, leading to excitement and pleasure when played. 

Are loyalty cards part of a game?
Airlines offering frequent flyer programmes are arguably players in this push for gamification.
Customers earn airmiles (points) for flights and move from up the tier levels perhaps from bronze to silver or gold (moving up to the next level and unlocking privileges). At times, there might even be the chance to complete a challenge, such as “take three flights in the next 90 days” to earn bonus airmiles.
Coffee cards, supermarket clubs and other retail schemes also have hallmarks of gamification.
Gamification is also used to encourage regular exercise or weight loss – and is used in money management apps.

Set the rules
Gamification is set to become more popular, with consultancy firm Gartner predicting that by 2015, more than 50% of organisations that manage innovation processes will gamify the processes.
A lesson is to be wise to who is setting the rule of the game.
Collecting airline frequent flyer points might be a savvy bonus for people who will be travelling anyway, can get a good price with the airline and enjoy that company’s service. In that case, it is as if the shopper has control of the game.
On the flipside, a traveller who gets swept up in the game and books flights in the hope of gaining additional status might like to take a moment to rethink their strategy.

(This post originally appeared on the Ezonomics website http://www.ezonomics.com/whatis/gamification)