Psychological construal of economic behavior

Research output: Contribution to journalArticlepeer-review

19 Scopus citations

Abstract

According to construal level theory (CLT) [Trope, Y., & Liberman, N. (2003). Temporal construal. Physical Review, 110, 403-421], psychological representation of information depends on "psychological distance", that is, on whether the relevant information refers to the near or distant psychological space. While CLT was originally developed to account for intertemporal choice, Trope and Liberman proposed that it could account for other dimensions of psychological distance such as social distance. We follow up on Trope and Liberman's proposal and demonstrate how CLT accounts for a wide range of economic behaviors such as predicting the choices of others, advice giving, saving for retirement, and the failure to annuitize assets at retirement. By explaining how CLT can account for these various economic behaviors and suggesting novel predictions, we hope to stimulate researchers to investigate further the role of psychological distance in economic behavior.

Original languageEnglish
Pages (from-to)762-776
Number of pages15
JournalJournal of Economic Psychology
Volume29
Issue number5
DOIs
StatePublished - 1 Nov 2008

Keywords

  • 3040
  • A12
  • Behavioral decision making
  • Behavioral economics
  • Construal level theory
  • D01
  • D14
  • D90
  • H55
  • Psychology and economics

ASJC Scopus subject areas

  • Sociology and Political Science
  • Applied Psychology
  • Economics and Econometrics

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