The Devil Wears Prada

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The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making Roy Y.J. Chua Xi Zou

Working Paper
10-034

Copyright © 2009 by Roy Y.J. Chua and Xi Zou Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author.

Running Head: Effects of Luxury Goods

The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making

Roy Y.J. Chua Harvard Business School 312 Morgan Hall, Boston, MA, 02163. Tel: (617)-495-6465 Fax: (617)-496-6568 Email: rchua@hbs.edu

Xi Zou London Business School Regent's Park London NW1 4SA, United Kingdom Tel: +44 (0)20 7000 8904 Email: czou@london.edu

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ABSTRACT Although the concept of luxury has been widely discussed in social theories and marketing research, relatively little research has directly examined the psychological consequences of exposure to luxury goods. This paper demonstrates that mere exposure to luxury goods increases individuals’ propensity to prioritize self-interests over others’ interests, influencing the decisions they make. Experiment 1 found that participants primed with luxury goods were more likely than those primed with non-luxury goods to endorse business decisions that benefit themselves but could potentially harm others. Using a word recognition task, Experiment 2 further demonstrates that exposure to luxury is likely to activate self-interest but not necessarily the tendency to harm others. Implications of these findings were discussed.

(Abstract word count: 114/150) (Text word count: 2492/2500) (Number of References: 21/30) Key Words: Luxury goods, Cognition, Decision making, Self-interest

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Gandhi once wrote that “a certain degree of physical harmony and comfort is necessary…but above a certain level it becomes a hindrance rather than a help.” (Tendulkar, 1961, p. 88). This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this report, we argue and present evidence that the mere exposure to luxury goods can increase individuals’ propensity to commit self-interested cognition and decision-making. Our argument involves two key premises: luxury is intrinsically linked to self-interest and mere exposure to luxury can activate related mental representations affecting cognition and decision-making. A wide range of research from social theories to brain studies (Berry, 1994; van der Veen, 2003; Twitchell, 2003; Hilton, 2004; Danziger, 2005; Tsai, 2005; Mandel, Petrova, & Cialdini, 2006) has discussed the concept of luxury. Although these discussions have taken various perspectives, a consistent theme is that luxury goods are related to the concept of personal desire. For example, Berry’s (1994) account in The Idea of Luxury and Twitchell’s (2003) account on American’s Love Affair with Luxury both described a link between the perpetuation of the luxury culture and individuals’ desires. In an experimental setting, Kemp (1998) found that a good was regarded as more luxurious if it was the object of desire as opposed to a relief for a state of discomfort. These accounts characterized luxury goods as progressive refinements of basic human needs. People pursue luxury in part to fulfill certain personal desires. In other words, the very notion of luxury involves increasing pleasure beyond basic functionality (van der Veen, 2003; Kemp, 1998), suggesting a motivation that focuses on hedonist experiences. Likewise, marketing researchers have shown that people buy luxury goods not merely to impress social others or gain symbolic status, but also to fulfill self-directed pleasures or gratification for themselves (Tsai, 2005; Vigneron & Johnson, 1999). Some indirect

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evidence on the link between luxury and...
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