The Psycho-Economics of Money and Social Support

Abstract

There has been a growing interest in the psychology of money (e.g., Rick, Cryder, & Loewenstein, 2008; Vohs, Mead, & Goode, 2006). In the target article, Zhou and Gao (this issue) offer a refreshing perspective on money and social support, maintaining that money and social support are substitutes of each other for alle viating pain. In a comprehensive review of the extant research literature, these authors found clear evidence for their view. Specifically, they found that (a) antici pation of pain heightens the desire for social support as well as the desire for money, (b) reminding people of social support and money can alleviate pain, and (c) so cial exclusion and monetary loss can cause pain. Zhou and Gao's innovative analysis suggests that money is not just a metric of utility attached to the goods and ser vices it can buy. Instead, money itself carries hedonic values through its (perceived) analgesic capability. In this commentary, we will expand Zhou and Gao's analysis by relating it to basic economic principles. We argue that because money and social support are sub stitutable analgesics, an individual's desire for them in concrete situations can be predicted from the shape of indifference curves relating the desirability of money and social support and the relative efficiency of pursu ing wealth and social support with limited resources. This psycho-economic analysis highlights the eco nomic rationality of optimizing the sedative utility or soothing comfort of money and social support. It orga nizes Zhou and Gao's ideas into a set of parsimonious and elegant propositions and brings out some broader implications that are not apparent in Zhou and Gao's theoretical narrative. In the last section of this com mentary, we go beyond optimization of soothing com fort and consider the value or utility people attach to identity signaling in materialistic consumption.