Impact of social norms and joint influences of social connection and self‐sufficiency motivations on prosocial budgeting

Abstract

AbstractThe current research reports results of seven studies that reveal how social norms information about people's spending on others makes one notice one's imbalanced (or lower) spending on others and feel unhappy about it. This motivates the consumer to undertake the corrective action of budgeting to spend more on others which then enhances happiness with her/his budgeting decision. These effects are stronger for time than for money and the mechanism underlying the corrective action is through the joint influences of social connection and self‐sufficiency motivations. Increasing saliency of the opportunity cost of time creates a boundary condition for the above effects and power in relationships moderates the imbalanced spending of time (vs. money) effect. These findings contribute to the literatures of social norms and time versus money by suggesting that social comparison can also influence prosocial budgeting to spend time and money on others. Managerially, peer‐to‐peer payment fintech companies, which have data about prosocial spending, can partner with restaurants and food delivery companies and with charitable institutions, to target messages to the customers of fintech companies urging them to use coupons to eat out with friends and to contribute to charitable causes.