The Benefits of Prosocial Spending, for Individuals and Organizations



Despite the fact that money has been shown to have a relatively small – though reliable – effect on happiness, humans devote much of their time and energy to earning more of it. We explore this contradiction in two ways. First, we demonstrate  that laypeople engage in behaviors designed to increase their wealth because they overestimate the impact that income has on well-being. Second, we explore a means by people might use their wealth to increase their well-being: investing income in others rather than themselves. In addition, we report the results of several field studies in which organizations empowered their customers and employees to engage in prosocial spending, demonstrating an impact on both these individuals and the organization's bottom line
Michael I. Norton is an Assistant Professor of Business Administration in the Marketing Unit at the Harvard Business School. He holds a B.A. in Psychology and English from Williams College and a Ph.D. in Psychology from Princeton University.
His work has been published in a number of leading academic journals, including Science, the Journal of Personality and Social Psychology, Psychological Science, and the Annual Review of Psychology, and has been covered in media outlets such as the New York Times, the Wall Street Journal, and the Washington Post. His research has twice been featured in the New York Times Magazine Year in Ideas issue, in 2007 (Ambiguity Promotes Liking) and 2009 (The Counterfeit Self). His "The IKEA Effect: When Labor Leads to Love" was featured in Harvard Business Review's Breakthrough Ideas for 2009..
Prior to joining HBS, Professor Norton was a Fellow at the MIT Media Lab and MIT’s Sloan School of Management, where he taught Marketing to both undergraduate and graduate students..
At HBS, he teaches the first-year MBA course in Marketing and in the executive program, Strategic Marketing Management.
Contact information:
Dr. S. Puntoni