Money and Self Esteem

Your Money or Your Self-Esteem: Threatened Egotism Promotes Costly Entrapment in Losing Endeavors

  1. Liqing Zhang Carnegie Mellon University
  1. Roy F. Baumeister Florida State University

Abstract

The present research explored egotism—maintaining favorable views of the self—as a motivation underlying entrapment in losing endeavors. Four studies suggested that threatened selfesteem would cause decision makers to invest and lose more money in a previously chosen course of action. Ego-threatened participants consistently lost more money than nonthreatened participants across diverse entrapping situations regardless of whether the outcome was ostensibly determined by luck (Experiments 1 and 4), ability (Experiment 2), or interpersonal competition (Experiment 3). Thus, pursuing favorable views of the self could be costly to decision makers’ financial well-being and may produce self-defeating behaviors.