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: Power can corrupt even the honest

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

Power can corrupt even the honest

13 hours ago

When appointing a new leader, selectors base their choice on several factors and typically look for leaders with desirable characteristics such as honesty and trustworthiness. However once leaders are in power, can we trust ...

Learning at 10 degrees north

14 hours ago

Secluded beaches, calypso music and the entertaining carnival are often what come to mind when thinking of the islands of Trinidad and Tobago. But Dal Earth Sciences students might first consider Trinidad's ...

How to find the knowns and unknowns in any research

15 hours ago

Have you ever felt overloaded by information? Ever wondered how to make sense of claims and counter-claims about a topic? With so much information out there on many different issues, how is a person new to ...

Minorities energize US consumer market, according to report

15 hours ago

The buying power of minority groups in the U.S. has reached new heights and continues to outpace cumulative inflation, according to the latest Multicultural Economy Report from the Selig Center for Economic Growth at the ...

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.