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When “good enough” is not good enough : How maximizing benefits financial well-being
Silber, Dietrich Hoffmann, Arvid O. I. Belli, A.
Silber, Dietrich
Hoffmann, Arvid O. I.
Belli, A.
Abstract
A maximizing decision-making style is generally associated with lower individual well-being. That is, even though maximizers invest more time and resources in finding the best option and achieve better outcomes than satisficers, they are still more dissatisfied with those outcomes. Contrary to this general consensus that maximizing is negatively associated with overall well-being, across two studies we show that this decision-making style is actually positively associated with individuals' financial well-being. We find that measured dispositional maximizing is positively associated with financial well-being, regardless of whether maximizing is operationalized as having high standards or the tendency to engage in alternative search (Study 1) and replicate this relationship with experimentally induced situational maximizing (Study 2). We identify financial self-control (both measured as a trait and as the behavioral outcome of an experimental choice task) as a mediator of the aforementioned relationship. Our findings offer guidance to financial service providers and policymakers on how to improve consumers' financial well-being, such as encouraging consumers to engage in a more meticulous search while evaluating financial products and services (e.g., home loans, retirement plans, investments) to identify the best possible option.
Keywords
financial self‐control, financial well‐being, maximizing, spending behavior
Date
2024
Type
Journal article
Journal
Book
Volume
41
Issue
2
Page Range
308-327
Article Number
ACU Department
Collections
Relation URI
Event URL
Open Access Status
License
All rights reserved
File Access
Controlled
Notes
© 2023 Wiley Periodicals LLC.