Sometimes self-control is belief-control

One of the hardest things for people to do is to resolve the tradeoff between short-term and long-term goals. For example, if you are trying to stick to a diet, it can be difficult to avoid a tempting piece of cake or a fresh gooey cookie straight from the oven.

A paper by Ying Zhang, Szu-Chi Huang and Susan Broniarczyk from the University of Texas in the June 2010 issue of the Journal of Consumer Research examines one way that people help themselves to overcome temptations.

A real temptation is one that has some aspect to it that conflicts directly with a long-term goal you want to satisfy.  If you are dieting, for example, the tempting food may be delicious, but it has a lot of calories in it.  If you are trying to maintain good grades, then a tempting party may be one that is going to be a lot of fun, but it is going to take time away from your studies. 

The authors find that when people are trying to pursue an important long-term goal, they change the way they think about temptations in ways that make the temptations seem more damaging to the long-term goal.

In one study, women were asked to evaluate a fresh chocolate-chip cookie.  Some women had the goal to diet, while others did not.  In addition, some women were told that they could choose to take the cookie with them after the study, while others were just told that they were evaluating the cookie.  The women who did not care about dieting said that the cookie had a moderate number of calories.  Their estimates were about the same as those of women who cared about dieting, but did not think they would be able to take a cookie with them.  Those who cared about dieting and were told they could take a cookie gave much higher estimates of the number of calories.  That is, these women saw the cookie as a much stronger temptation than the other people in the study. In a second study, the authors found that overestimating the calories in a tempting food led dieters to eat less of that food later, so this strategy was successful.

A third study demonstrated a similar finding with the goal of studying.  People who had an active goal of getting good grades estimated the length of a tempting party to be much longer than those who did not have this goal.

Chances are, this strategy is not a conscious one.  That is, people who are trying to diet are not telling themselves that cookies are tempting.  Instead, these findings are another example of the way our perception of the world is changed by our goals.  In previous blog entries, I have talked about how we see things that we want as physically closer to us than things that we do not want.  This research suggests that we also view temptations as more disruptive of our goals than they really are. 

The reason that this strategy is effective is that long-term goals are usually very abstract.  A single cookie or soft drink does not cause our diet to fail.  Instead, it is the accumulation of calories that disrupts a diet.  Overestimating the danger of each snack is one way to make the temptation feel real in the present, which eventually protects the long-term goal.

Spending money with credit cards and cash

In my last blog entry, I wrote about research suggesting that people may spend small bills more freely than large bills. A number of people asked me what happens with credit and debit cards.

Debit and credit cards are an important part of our economic lives. These days, it is almost a surprise to go to a store and see someone pay with cash or a check.

There are many advantages of debit and credit cards, of course. They are easy to carry. You are not limited by the specific amount of money in your pocket. There is protection for cards that are lost or stolen, while money that is lost is just gone.

Obviously, credit cards have their dangers. The most obvious of these dangers is that they typically carry high interest rates. Once a person goes into credit card debt, it can be hard to dig out from beneath the payments.

There is also a lot of evidence that consumers spend more money when paying with credit cards than when they are spending cash. For example, Drazen Prelec and Duncan Simester reported studies on this topic in a 2001 issue of Marketing Letters. In one study, they told that randomly selected participants in the study would be offered the opportunity to purchase tickets to an actual professional basketball game that had just sold out. These tickets were highly desirable. Participants were told either that they would have to pay in cash or that they would have to pay by credit card. They were asked how much they would be willing to pay for these tickets. Those who were told they would have to pay by credit card were willing to pay over twice as much on average as those who were told that they would have to pay by cash.

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What is going on here?

There are many possible explanations for the observation that people pay more when using credit cards than when using cash.

For example, Richard Feinberg explored the link between credit cards and spending in a 1986 article in the Journal of Consumer Research. He varied whether people could see credit card logos while they were making purchases or leaving restaurant tips. People left higher tips and indicated that they would be willing to spend more for products when they could see a credit card logo at the time than if they could not.

In addition, people may pay less attention to prices when they are paying by credit card than when they are paying by cash. For example, the article by Prelec and Simester cites an unpublished study by Dilip Soman suggesting that people are less likely to remember the amount they spent on a purchase when they pay with a credit card than when they pay with cash.

This last finding relates to many observations in a variety of settings that people are better able to control their behavior when they have physical objects that help to guide their behavior than if they have to think conceptually. For example, people taking food at a buffet may have the desire to control the amount of food that they eat, but they still tend to fill their plate. Thus, they eat more overall if they are given a large plate than if they are given a small plate.

Likewise, driving behavior is affected by the type of speedometer in the car. For a while, car manufacturers were putting digital speedometers in cars. It is hard for people to judge the change in speed with a digital speedometer relative to an analog speedometer, because they have to actually think about the change in numbers.

Credit cards have this character as well. To stay within a budget using a credit card, you have to remember the prices for each of the items and then keep track of how those prices relate to your overall budget. If you have cash, then you can also limit the amount of cash that you carry as a way of limiting the amount you spend without having to remember all of the purchases you have made.

As you can see, many factors come together to make it difficult to maintain a budget when spending with credit cards. Perhaps the title of the paper by Prelec and Simester says it best: "Always leave home without it."