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• Article | Personality and Social Psychology Bulletin | December 2020

  Can't Buy Me Love (or Friendship): Social Consequences of Financially Contingent Self-Worth

  D. Ward, L.E. Park, K. Naragon-Gainey, H. Jung and A.V. Whillans

  Although people may think that money improves one’s relationships, research suggests otherwise. Focusing on money is associated with spending less time maintaining relationships (Whillans & Dunn, 2018) and less desire to rely on others for help (Vohs, Mead, & Goode, 2006). But why does focusing on money relate to worse social outcomes? We propose that when people base their self-esteem on financial success – i.e., have financially contingent self-worth – they are likely to feel pressured to pursue success in this domain, which may come at the expense of spending time with close others. Consistent with this idea, results of four cross-sectional studies (N=2,439) and a daily diary study (N=246) revealed that basing one’s self-worth on financial success is associated with greater feelings of loneliness and social disconnection, and this may be related to experiencing less autonomy and spending less time with family and friends.

  Keywords: Self-Esteem; Money; Relationships; Welfare or Wellbeing;

  Citation:

  Ward, D., L.E. Park, K. Naragon-Gainey, H. Jung, and A.V. Whillans. "Can't Buy Me Love (or Friendship): Social Consequences of Financially Contingent Self-Worth." Personality and Social Psychology Bulletin 46, no. 12 (December 2020): 1665–1681.  View Details

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• Teaching Note | HBS Case Collection | November 2020

  Social Salary Setting at Spiber

  Ashley Whillans and John Beshears

  This case tells the story of Spiber, a Japanese technology start-up company. To reflect the company’s values, the leadership team implemented a new and unique salary-setting process: each employee had the authority to choose their own salary. In the course of discussing the case, students are asked to contemplate the challenges that managers face when incentivizing innovation and are invited to brainstorm methods for motivating the behaviors that drive innovation. Students consider the merits of Spiber’s new compensation system and reflect on issues of pay equity. The case allows for a rich discussion regarding the design of effective and fair compensation systems, with a special emphasis on exploring how organizational culture and the broader social and cultural context in which an organization is embedded shape employees’ responses to compensation systems.

  Keywords: compensation; general management; employee benefits; happiness; incentives; motivation; negotiation;

  Citation:

  Whillans, Ashley, and John Beshears. "Social Salary Setting at Spiber." Harvard Business School Teaching Note 921-014, November 2020.  View Details

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• Working Paper | HBS Working Paper Series | 2020

  Income Volatility Increases Financial Impatience

  Colin West, A.V. Whillans and Sanford DeVoe

  Using a multi-method approach, we investigate whether income volatility is associated with financial impatience—the preference to receive a small sum of money immediately over a larger sum of money later. We find that experiencing more income volatility—including a higher frequency of either income dips or spikes – is associated with greater financial impatience. Using longitudinal data on biannual income, Study 1 demonstrates that this effect operates above and beyond individual differences in income risk preferences and wealth. Study 2 conceptually replicates these correlational findings with recent month-to-month income volatility and finds that this effect occurs primarily among people who report having little control over their finances. Using a longitudinal field experimental with low-income working women, Study 3 tests for a causal effect of an externally-induced spike in monthly income on changes in financial impatience. In a pre-post test experimental design, participants randomly assigned to receive cash transfers amounting to a median monthly income spike of 29% exhibit significantly greater financial impatience compared to a control condition in which participants receive no cash transfers. We conclude by discussing the implications of these findings for employers and policymakers.

  Keywords: income volatility; compensation; impatience; time preferences; Income; Personal Finance; Behavior; Demographics; Policy;

  Citation:

  West, Colin, A.V. Whillans, and Sanford DeVoe. "Income Volatility Increases Financial Impatience." Harvard Business School Working Paper, No. 21-053, October 2020.  View Details

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