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Comment by MrFoof | Hacker News Reader

Anecdotally and simply observed over the years, individuals seem to be very defensive about what they choose to spend their money on, but how defensive they are decreases as their income increases. Houses. Colleges. Cars. Big-ticket electronic items.

I'm curious, does anyone have any interesting material or studies that have looked into this phenomenon?

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From memory (sorry no source) I believe it is related to the amount of emotional tension the individual experiences, and the release felt, in making the purchase. It is not the amount of money involved. So taking two people with the same income and net worth, if one person gets very emotionally committed and spends a lot of time socializing and projecting how great product X is going to be and feeling bad because he doesn't have it yet, and the other person just buys it on a lark? The first person will tend to be very dogmatic, perhaps religious or irrational, about the value of the product. This effect is culmulative.

By the way, this "release" that is felt after the immediate purchase has a tremendous cognitive blinding ability. The purchaser is something like 100 times more willing to buy some related product in the immediate minutes after the big decision is made while the "glow" is still there. LOTS of folks make BIG money exploiting this.

By the way, the tendency among intelligent people is to view a lot of this as "psycho-babble" or some such. So they spend a lot of time online, doing research, reading various opinions, making an informed choice -- all the while falling into the trap outlined above. Except they don't see it.

Humans are really cool to observe. They are the only creatures that can act completely emotionally and then beat the heck out of you using logic and facts when you point out what's going on. That's neat

http://www.paulgraham.com/identity.html

http://en.wikipedia.org/wiki/Cognitive_dissonance

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