Chapter 4 Lay Theories: Knowledge and Money Flashcards
Theory of social representation
– opinions are a complex result of experiences, emotionally loaded judgments, and information that is subjectively experienced, transformed and cognitively available
– social representations consist of core elements and peripheral elements
– social representations are formed through processes of anchoring and objectification
• Core elements
– central parts
– define the meaning of a social representation
– organize the social representation
– explicit and implicit basis for discourse
• Peripheral Elements
– make the core more concrete and understandable
– adapt to the temporal development in context
– protect the stable core of the social representation
• Anchoring
– process where the social representation is linked to existing categories of representations
– during the process, existing categories and representations can change
• Objectification
– process where the social representation is made vivid through quasi-physical objects
– “drawing a picture”
– abstract concepts are represented as images, symbols or metaphors
Functions of social representation
• Main function: make new phenomena understandable and usable in everyday discourse
• Additional functions
– Selective function: distinguish between own social group and others
– Justificatory function: stereotypes about social classes justify economic Differentiation
– Anticipatory function: interaction patterns between groups can be anticipated
– Attributional function: provide explanation of social behaviour
– Social identity function: provide social identity, how people see themselves as part of a group
social categorisation theory
– information about persons and objects is cognitively represented in schemata that are formed through categorisation
– processes of social categorization help to structure social events and therefore offer a basis for Actions
• assimilation effects
– similarities within a category are perceived as more pronounced than they actually are
• contrast effects
– differences between categories are perceived as more pronounced than they actually are
social identity theory
– people strive for a satisfactory self-concept
– part of the self-concept is determined by membership in Groups
– social identity arises from categorisation processes in which the social environment is divided into ‘own’ and ‘other’ environment
Development of economic motives
- With age, children´s thinking becomes less egocentric
- Motives develop from pure selfishness to altruistic cooperation
- Trust and trustworthiness increase with age: younger children act egoistically and trust is not rewarded
Influence of children
• Influence
– depends on product category
– increases with age
• Influence strategies
– change with age
– most effective strategies are money deals, reasoning, direct asking
• Indirect influence through coalitions in conflicts between parents
Financial literacy
– the ability to understand and use financial concepts
• Often very low levels of financial literacy in general population
• Financial literacy related to
– socio-economic factors (women, groups with low general education, minority groups fare worse)
– unfavourable economic outcomes (e.g., less savings)
– potential vicious circle (potentieller Teufelskreis)
• Financial literacy can come from parents, work experience or financial education
Money is desired for three reasons
– transactional motives (e.g., planned purchases)
– precautionary motives (e.g., being prepared for unplanned circumstances)
– speculative motives (e.g., buying stocks to make profit)
Money attitudes
• Meaning of money differs between people – security: being anxious to have too few resources
– retention: finding it easy or difficult to spend money
– power/prestige: associating money with power, influence and prestige
• Gender differences
– men saw money more as an expression of power and prestige than women
– women saw money less connected to their sense of self than men
– women saw money more important in comparison with other people than men
Subjective value of money
• resource theory
– social interactions are based on the exchange of different resources, including money, information, goods, services, status and love
• operant conditioning theory
– the probability of a behaviour is increased by rewarding stimuli (reinforcers) following that behaviour
– primary reinforcers are rewarding in themselves
– secondary reinforcers have acquired a reward quality through learning processes
- Money as a „generalized secondary reinforcer“ serving different Needs
- Money valued more if acquiring and keeping of money has been rewarded in the past
- “Expansion effects” can occur: money becomes a motive on its own
Windfall gains
(unexpected gains) treated differently than expected gains, e.g., spent more easily and invested more riskily than money that was earned through hard work
– hard-earned income more likely to be declared honestly than easily earned money in order to secure at least the net income
Money illusion
– perceived economic value of money amounts is influenced by the units in which they are represented
– nominal values are given too much weight, real values too little
selective outcome correction process
– errors that occur in price comparison are more likely to be detected and corrected when they are inconsistent with expectations
Adaption to new Prices - opponents
• However, euro opponents adapted slower. Explanation: Hindsight bias
– opponents predicted more problems; in hindsight they selectively focused on problems to confirm their expectations
– hindsight bias is moderated by attitudes: euro supporters claimed to have foreseen the positive developments, opponents the negative developments
Price-Quality-heuristic
– belief that there is a positive correlation between price and Quality
• Consequences
– choosing the more expensive product
– experiencing the more expensive product differently
