Are You a Mindless Accumulator?

September 21, 2017

I’ve been reading some fascinating research on behavioral economics lately. I recently stumbled across a new study from the Chicago Booth School of Business on what the authors are calling “mindless accumulation.”

This term is a vivid description of our instinct to accumulate more than we can consume, even when doing so bring us unhappiness. Here is the abstract from the research:

“High productivity and high earning rates brought about by modern technologies make it possible for people to work less and enjoy more, yet many continue to work assiduously to earn more. Do people overearn—forgo leisure to work and earn beyond their needs? This question is understudied, partly because in real life, determining the right amount of earning and defining overearning are difficult.

In this research, we introduced a minimalistic paradigm that allows researchers to study overearning in a controlled laboratory setting. Using this paradigm, we found that individuals do overearn, even at the cost of happiness, and that overearning is a result of mindless accumulation—a tendency to work and earn until feeling tired rather than until having enough.

Supporting the mindless-accumulation notion, our results show, first, that individuals work about the same amount regardless of earning rates and hence are more likely to overearn when earning rates are high than when they are low, and second, that prompting individuals to consider the consequences of their earnings or denying them excessive earnings can disrupt mindless accumulation and enhance happiness.”

The Experiment

To explore the notion of mindless accumulation, the researchers constructed an experiment in two phases. In the first phase, subjects sat for five minutes in front of a computer wearing a headset, and had the choice of listening to pleasant music or to obnoxious-sounding white noise.

They were told they could earn pieces of Dove chocolate when they listened to the white noise a certain number of times. Some participants had to listen fewer times to get each piece of chocolate, making them “high earners”; some had to listen more times, making them “low earners.”

All were told that there would be a second phase to the experiment, also lasting five minutes, in which they could eat the chocolate they earned. But they were told they would forfeit any chocolate they couldn’t consume, and they were asked how much they expected to be able to eat.

The Results

On average, people in the high-earner group predicted that they could consume 3.75 chocolates.But when it came time to “earn” chocolates, they accumulated well beyond their estimate. On average, they listened to enough white noise to earn 10.74 chocolates. Then they actually ate less than half of that amount.

In other words, they subjected themselves to harsh noise to earn more than they could consume, or predicted they could consume.

The impulse seemed less pronounced, even mixed, with the low earners. They earned less chocolate than they predicted they could eat. But the high earners and the low earners listened to about the same amount of obnoxious noise in the five-minute period. Dr. Christopher Hsee, one of the authors,  said this strongly suggested that both groups were driven by the same thing: not by how much they need, but by how much work they could withstand.

My Thoughts

I can see the correlation between chocolates and dollar bills. There are workaholics who can never seem to earn enough. Even with bank accounts the size of Texas, somehow they need more. Some honestly believe they’ll get to enjoy it all once they hit 65. If they hit 65, that is.

Then there are the individuals earning a fantastically high dollar per hour wage, far higher than those in other countries, or their ancestors, and yet they live paycheck to paycheck. This is a sad result of materialism and what I would call mindless accumulation.

And of course, we must also consider the financial independence loving, high savings rate, world traveling freelancers that dominate the online world. They seem to have a grasp on the concept of enjoying life, cutting back hours, or exiting the rat race at a young age. But I don’t think they are exempt from these findings. How many of us worry if enough is enough? We’re still out there grinding away to save a big golden nest egg filled with dollars. But at what point is it enough?

At the same time, life does have its obligations. Money is a necessity, and as exciting as unemployment may be, I believe that I have an obligation to work hard, take care of my own, and be a productive human being. So working too little and quitting too soon is no solution at all.

At the heart of this study is the question of priorities. How can we earn enough to live, while avoiding earning too much at the expense of enjoying life? It’s a tough question to answer, but I think limiting expenses allows much more freedom in that choice.

On a side note, this was a rather simple study, and I do wonder if the results are applicable in the bigger picture of real life. After all, happiness is a difficult thing to measure, and it comes in many forms.

What’s your take?

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26 Comments on "Are You a Mindless Accumulator?"

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La Tejana @ Debt Free Tejana
La Tejana @ Debt Free Tejana

Interesting question and I completely agree with Mario when he commented (quoted from above) “I see it as another form of risk aversion. People aren’t sure if an extra $20k will make them happy…but they don’t want to take the chance that they *don’t* earn it and find out that it would have”. Risk/loss aversion pushes humans to do all kinds of things.

If you are interested in Behavioral Econ, try reading “Nudge” by Sunstein and Thaler, “The Power of Habit” by Duhigg or “Sway” by Brafman and Brafman. All very interesting and insightful reads!

jlcollinsnh
jlcollinsnh

Hi Jacob…

Found my way here thru Rockstar Finance.

It has always been interesting to me that those who live below their means, and accumulate wealth in the process, learn how little stuff matters and, by extension, how little wealth they really need.

Nice post!

Kendal @HassleFreeSaver
Kendal @HassleFreeSaver
Thought-provoking post, Jacob! I used to have an over-earning mindset until I got completely burnt out. Sometimes, those workaholic thoughts still cross my mind; just this morning I found myself awake earlier than usual, and as I was getting ready I thought “maybe I should go to work now.” And then I realized there was no need to — I can get done what needs to be accomplished in 8 hours (easy! More like 6 hours!), so why the rush? Instead, I made myself a smoothie, checked email, purchased tickets to an upcoming art exhibition and did a load of… Read more »
Elroy
Elroy

I wrote an article about the Hedonic Treadmill. http://moiandmoney.com/2013/12/27/treadmill-of-hedonism/

For me, I want money. And I want lots of it. Not so I can have others think I am rich or I have this or that, but because I have a goal to spend oodles of time with my wife and with my girls.

GamingYourFinances
GamingYourFinances

Personally I think the idea of “enough” will take a few generations to sink in. My grandparents had to work exceptionally hard for what they had and that was only 60 years ago. It’ll take some time to adapt to a world of abundance.

Stefanie @ The Broke and Beautiful Life
Stefanie @ The Broke and Beautiful Life

The boyfriend and I were reflecting on 2013 and he had a moment where he was realizing he probably made less in 2013 than 2012 because of the two extended vacations he took. I then asked him if it was worth it? And he said absolutely with a big smile. We’d go to parties and watch everyone caught up in the rat race, and he’d be so relaxed, enjoying time off while still making more than enough money to pay for life today and tomorrow.

Ryan @ Impersonal Finance
Ryan @ Impersonal Finance
I hadn’t heard of this study yet, so thanks for sharing. I guess it really depends on what is enough. I don’t like chocolate, so I can’t see myself sitting through it. But, I do like dollars. I don’t necessarily over-consume outside of pizza, but I think a lot of what drives me is fear of not having enough. And by that, I mean enough to do as I please. Recently there was a study showing happiness really didn’t increase with a salary above $75k a year, but I think too many people live a lifestyle unable to be afforded… Read more »
Mark Ross
Mark Ross

Interesting study and a great one too! I think most people are working hard just to sustain teir lavish lifestyle and to be able to show others that they are wealthy, but in reality, they are not and are only living paycheck to paycheck. They often forget that it’s really not how much you earn but how much you can save and what you do with the money that you have.

Debt BLAG
Debt BLAG

I like this post. It’s an interesting question. When we look around, I think we intuitively correlate imagined happiness with imagined wealth increases rather than happiness with actual increasing levels of wealth. Of course, this goes the other way as well when it comes to pain — we’re pretty terrible at guessing these things.

I see it as another form of risk aversion. People aren’t sure if an extra $20k will make them happy…but they don’t want to take the chance that they *don’t* earn it and find out that it would have

Kathy
Kathy

In terms of strictly dollars, I’m not sure that you can ever have enough. Well, perhaps if you won the $500 million lotto jackpot. But seriously, you not only have to plan for your retirement but also for the very realistic possibility of needing many years of long term care in an assisted living or nursing facility. And I certainly expect that someday the government will institute a wealth or deposits tax where they decide taxing just income isn’t enough. The trick will be to grow your money through investing without having to work more.

Old Dude
Old Dude
I am 63 and have ” hit my number” through a lot of long term buy and hold investing and frugality. At age 48 I accumulated about $600,000 liquid assets – I tripled this 15 years later. Never had the big salary, but certainly adequate. Lesson here is that time is on your side with investing. Yet I know people my age, which is not atypical, who have $100,000 or so – they were not frugal or planners for the future. I am retiring in 2015- not rich– but, enough is enough.
jim
jim

Old Dude,
If you’ve got $1.8M in your retirement AND another year to contribute to that why in the world do you think you’ve just got an “adequate” amount for retirement? I would think you could live very nicely off that (without touching the principle for many, many years). You’re starting to scare me.

old dude
old dude

If I could get a guaranteed 8% return on 1.8 million I would stop working tomorrow. But am done next year for sure once I get Medicare. Social Security at age 66.
Yet, you are probably right. Why am I slaving away all day when I could be on a Cruise in the Carribean or helping starving refugees, etc etc? 2015 for sure.

Shannon @ The Heavy Purse
Shannon @ The Heavy Purse
Very interesting, Jacob. It’s not surprising when you think about it. The fear of not having enough runs in everyone and in some of us – very deeply. We think we need more (and are often told we do) so we work harder to consume more. We don’t often don’t consider whether that is true or not. And then, as you mentioned, there is also that notion of we’re not working hard and trying to earn more … we are lazy and not working towards our fullest potential. I struggle with this sometimes. I am always working or doing something,… Read more »
Done by Forty
Done by Forty

Interesting analysis, Jacob. “Enough” is my favorite concept in PF: it’s like the holy grail of financial targets. We’re all chasing it, but it’s nearly impossible to know when you have it.

Elizabeth Hodge
Elizabeth Hodge

I wholeheartedly recommend the book Affluenza by Oliver James, if you want to understand the disease of affluence which afflicts our modern world; driven by envy and obsession, in order to keep up with the Joneses. Instead of resulting in happiness, it results in depression. It answers all the questions you have been posing in this article. And also the website Becoming Minimalist if you want to learn how to be happy and enjoy life, without so many possessions.

Grayson @ Debt Roundup
Grayson @ Debt Roundup

Awesome post! This was a really great view into the study. I think before when I was building up my debt, I was working hard to earn more, but I would continue to over-consume. Now, I work hard to earn more in a view of a goal that I have set. I don’t want to work this hard my whole life, but just enough to achieve what I have set out for myself.

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