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BEAR x BIOrg Webinar on Spending & Saving (Apr 19)

This webinar hosted by BEAR x BI-Org will feature researchers from the University of Chicago discussing their research on saving and spending decisions […]

BEAR x BI-Org Webinar Series:

Consumers’ Mental Representation of Expenditures:
Implications for Spending and Saving Decisions

Lin Fei & Daniel Bartels
University of Chicago

Wed., April 19, 2023 from 9-10am PT

Consumers often maintain budgets. Past research often assumed that consumers budget by thinking about categories of expenditures that are independent from each other such as “food” and “entertainment”. The present research proposes that consumers represent expenditures in hierarchical, nested categories. For example, consumers think about “cereal” as a member of the category “breakfast foods” before they think about them as a member of the more general “food” category. Fei and Bartels find, in both online experiments and observed grocery purchase behaviours, that people’s adjustment in their spending behaviour can be predicted by their represented hierarchy of expenditures. This adjustment appears to be spontaneous—these categories do not need to be primed directly by experimenters. Thus, the present research makes contributions by providing a methodology to study consumers’ representations, advancing our understanding on how consumers budget, and providing implications for marketers who design categorical labels for consumers.

  • Lin Fei is a PhD candidate at the University of Chicago Booth School of Business. Her research focuses on understanding the representation of consumer behaviors such as budgeting and adoption of technology.  
  • Dan Bartels is a Professor in Marketing at the University of Chicago Booth School of Business. His research investigates the mental representations and processes underlying consumer financial decision making, moral psychology, and intertemporal choice.

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