Go for broke: Consumers who set conservative goals feel less satisfied

May 09, 2011

Consumers who set conservative goals have a harder time achieving satisfaction than those who set ambitious goals, according to a new study in the Journal of Consumer Research. When cautious consumers meet their goals, they tend to raise the bar and compare themselves to the highest possible standards.

Authors Cecile K. Cho (University of California, Riverside) and Venkataramani Johar (Columbia University) compared people who set conservative goals with people who set ambitious goals. They focused on situations in which goals were achieved, and measured the level of satisfaction with the achieved goals.

In one experiment, the researchers asked to set a target goal before they collected information on several stocks and picked three. They were then provided with the performance of the three stocks they picked. "When participants find out that their investment goals have been met, those who set a conservative goal are less satisfied than those who set ambitious goals," the authors write. The same was true with a subsequent experiment with puzzles.

"Satisfaction is often driven by comparing the level of performance to a different standard than one's initial goal," the authors write. They found that when participants were reminded of the goals they had set, they reached similar levels of satisfaction, regardless of whether the performance was low or high.

The authors found that people's beliefs about the nature of their skills and abilities played a role in their and their satisfaction level. People who believe that their skills can be improved with practice are equally satisfied with relatively high or low levels of performance. But people who believe that abilities are fixed tend to set higher goals and feel less satisfaction.

"People are wistful of 'what could be,' especially if they believe they cannot attain the potential," the authors write. The tendency to upward compare is common in . Although investors are advised to put together their portfolios to reflect their risk tolerance, the returns on their chosen investment funds often seem inferior to the better performing funds.

"Reminding investors of their long-term investment goals and their risk-tolerance levels is likely to counter the to compare to the top-performing alternatives, and can keep investors satisfied even if they do not receive dazzling returns," the authors conclude.

Explore further: Less privileged kids shine at university, according to study

More information: Cecile K. Cho and Venkataramani Johar. "Attaining Satisfaction." Journal of Consumer Research: December 2011 (published online April 19, 2011). Further information: ejcr.org

add to favorites email to friend print save as pdf

Related Stories

Your view of personal goals can affect your relationships

Nov 16, 2010

whether it's to improve yourself or to do better than others—can affect whether you reach those goals. Different kinds of goals can also have distinct effects on your relationships with people around you, according to ...

Recommended for you

Why are UK teenagers skipping school?

Dec 18, 2014

Analysis of the results of a large-scale survey reveals the extent of truancy in English secondary schools and sheds light on the mental health of the country's teens.

Fewer lectures, more group work

Dec 18, 2014

Professor Cees van der Vleuten from Maastricht University is a Visiting Professor at Wits University who believes that learning should be student centred.

How to teach all students to think critically

Dec 18, 2014

All first year students at the University of Technology Sydney could soon be required to take a compulsory maths course in an attempt to give them some numerical thinking skills. ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

3432682
3 / 5 (2) May 09, 2011
The word "consumers" should not be applied to people buying stocks. Those are "investors". Those not very skilled at stock picking should be considered "gamblers". I would not use the word "conservative" either; use "cautious" instead. Carry on.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.