Who Foots the Bill? Unraveling Happiness in Shared Experiences through Payment Dynamics

Following the global pandemic, consumers have reportedly become increasingly lonely which has notably affected their happiness and wellbeing (Cox 2021). In response to the loneliness epidemic, US consumers engaged in ‘revenge spending’ by expending large amounts of income on recreational activities to spend time with loved ones and meet new people (Holman 2023; Smialek 2023). Although this has led to an increase in admission prices (Chen 2022; Small 2023), consumers are increasingly spending more on recreation and shared consumption experiences (IbisWorld 2023). However, despite that many consumers are becoming increasingly lonely and financially limited, the role of payment arrangements among consumers in these experiences remains significantly underexplored. Existing research that observes payment arrangements often focuses on gifting (Givi et al. 2023) or the management of finances in monogamous relationships (e.g., Olsen et al. 2023; Ward and Lynch Jr. 2019). Although insightful, there remains a gap in existing knowledge about the effect that payment arrangements have on consumer wellbeing which is becoming increasingly relevant to understand. This proposed research aims to bridge this gap by conducting various experimental studies to examine the effect of payment arrangements on consumer happiness in shared consumption experiences.
Although money itself is occasionally linked to higher happiness, it can have a negative effect on consumer wellbeing. Such that the intersection of money and personal relationships has been shown to impair consumer wellbeing. Even the mere exposure to money can result in negative social behaviors such that consumers become less generous towards others (Vohs, Mead and Goode 2006), less inclined to socialize (Mogilner 2010), more opportunistic (Kouchaki et al. 2013) and more accepting of market and social inequalities (Caruso et al. 2013).
Money and social connectedness are notably both survival resources. Humans rely on either monetary resources and/or social networks to survive, and a lack of access to either resource can result in negative psychological outcomes felt on the consumer such as tension and distress (Zhou and Gao 2008). However, previous research suggests that the salient presence of one (money or social connectedness) can overcome the absence of the other (social connectedness) or money. Specifically, Zhou, Vohs and Baumeister (2009) found that counting money helps individuals to overcome feelings of distress that arise when they are socially excluded. Duclos, Wan and Jiang (2012) find that in the absence of social connectedness, consumers engage in compensatory behavior in the pursuit of more money. Conversely, Lasaleta, Sedikides and Vohs (2014) find that when consumers are exposed to positive social associations with close social ties, the need to conserve monetary resources is also reduced. In shared consumption experiences, consumers are willing to sacrifice resources in pursuit of spending time with close social ties. Specifically, Garcia-Rada, Norton and Ratner (2023) find that consumers will compromise experience quality in favor of shared memories. Whereas, Garcia-Rada, Anik and Ariely (2019) find that consumers will forgo their own preferences in favor of that of their partner which results in a higher enjoyment and positive affect. Thus, taken together consumers would likely be happier if they were to conserve (spend) their monetary resources in shared consumption experience with weak (vs. strong) social ties.
To test this hypothesis, Study 1 employed a 2 x 3 (social tie: close friend vs. neighborhood, payment: split payment vs. consumer pays all vs. other consumer pays all) between-subjects experimental design. We recruited three hundred and sixty-six Australian participants through Prolific (Mage = 43.94, SDage = 16.99; 47.27% female). Participants named either a neighborhood acquaintance or a close friend depending on their randomly allocated condition and were shown a scenario about going to the cinema with the chosen person and the randomly assigned payment condition. Results indicated that in the close friend condition, participants were significantly happier when they paid the full amount (M = 7.32, SD = 1.51) than when the other person paid the full amount (M = 6.13, SD = 1.71, p < 0.001) and when the payment was split (M = 6.38, SD = 1.78, p = 0.01). Conversely, the opposite was the case for the acquaintance condition, such that participants were significantly less happy when they had to pay the full amount (M = 5.12, SD = 2.03) than when the payment was split (M = 6.31, SD = 1.58, p < 0.001) or when the other consumer paid for both (M = 5.96, SD = 1.59, p = 0.02).
To check the robustness of the effect, study 2 replicated the same procedure but with 2 x additional conditions that relate to the price of the cinema ticket (cheap $10 vs. expensive $25). We recruited six hundred and thirty one US participants from Prolific (Mage = 40.23, SDage = 13.55; 47.70% female) Results indicate a similar overall pattern in the close friend condition such that consumers are significantly more happy when they pay (M = 6.55, SD = 1.95) than when the amount is split (M = 5.90, SD = 1.99, p = 0.02) but not when the other pays unlike in Study 1 (M = 6.28, SD = 1.73, p = 0.30). In the neighborhood acquaintance condition, we find that consumers are significantly happiest when the other person pays (M = 6.25, SD = 1.69) than when they pay (M = 5.32, SD = 2.16, p < 0.001) or when the amount is split (M =5.61, SD = 2.04, p = 0.02). However, findings are subject to successful interaction effects, such that in the more expensive condition others paying results in significantly more happiness than the consumer paying (p < 0.01), or the amount being split (p = 0.01), than in the cheap condition, where the effect does not exist.
Study 1 and 2 demonstrates that in the presence of social connectedness in shared consumption experiences consumers derive more happiness from being able to pay. Conversely, when engaging in shared consumption experiences with less connected or familiar individuals, consumers derive more happiness from conserving monetary resources. Our findings add to research that explores consumer behavior following the exposure of money and especially with the intersection of social contexts. Further, understanding the role of money and payment arrangements expands knowledge about consumer wellbeing in experiential contexts.

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