Neural mechanisms of credit card spending
Name
s41598-021-83488-3.pdf
Description
Published version
Size
1.83 MB
Format
Adobe PDF
Checksum (MD5)
9a59c75d258b77276fde8c21153d256c
Author(s)
Banker, Sachin
Dunfield, Derek
Huang, Alex
Prelec, Drazen
Date Issued
2021
Journal
Scientific Reports
Publisher
Springer Science and Business Media LLC
Citation
Banker, Sachin, Dunfield, Derek, Huang, Alex and Prelec, Drazen. 2021. "Neural mechanisms of credit card spending." Scientific Reports, 11 (1).
Version
Final published version
Abstract
Credit cards have often been blamed for consumer overspending and for the growth in household debt. Indeed, laboratory studies of purchase behavior have shown that credit cards can facilitate spending in ways that are difficult to justify on purely financial grounds. However, the psychological mechanisms behind this spending facilitation effect remain conjectural. A leading hypothesis is that credit cards reduce the pain of payment and so ‘release the brakes’ that hold expenditures in check. Alternatively, credit cards could provide a ‘step on the gas,’ increasing motivation to spend. Here we present the first evidence of differences in brain activation in the presence of real credit and cash purchase opportunities. In an fMRI shopping task, participants purchased items tailored to their interests, either by using a personal credit card or their own cash. Credit card purchases were associated with strong activation in the striatum, which coincided with onset of the credit card cue and was not related to product price. In contrast, reward network activation weakly predicted cash purchases, and only among relatively cheaper items. The presence of reward network activation differences highlights the potential neural impact of novel payment instruments in stimulating spending—these fundamental reward mechanisms could be exploited by new payment methods as we transition to a purely cashless society.
MIT Department
Sloan School of Management
Massachusetts Institute of Technology. Department of Brain and Cognitive Sciences
Massachusetts Institute of Technology. Department of Economics
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Creative Commons Attribution 4.0 International license
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DOI of Published Version
https://doi.org/10.1038/S41598-021-83488-3
