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Cash Rewards Might Make Us Unhappy

A recent study finds that when we can easily quantify a good we tend to be less happy with it, as opposed to those goods that are less easily quantifiable. Christie Nicholson reports

Consider the office birthday party and your slice of cake looks slightly smaller than some. Eh, probably no big deal. Now imagine that instead of cake, everyone got cash. And you got three bucks, while some others got four.

Researchers did this experiment. One group of subjects got cake slices of varying sizes. The other group got cash. Everyone could see what others in their group received. And those in the cash group who received less money than others were upset. But for the cake group, where the size of slices was harder to measure, everyone was equally happy. The study is in the Journal of Consumer Research.

In another trial, researchers found that subjects were unhappy when they missed out on a deal that had a specific quantity associated with it, like “buy one, get one free” versus a more vague deal that said, “get a larger bottle at the regular price.”

The researchers note that when you can’t easily measure something, you tend to be more focused on the experience that the good offers. They even say that we might be happier in a barter economy. Although it’s easier to carry cash than a lot of trade-able goods. 

—Christie Nicholson

[The above text is a transcript of this podcast.]

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