Why do cashless payments increase unhealthy consumption? The decision-risk inattention hypothesis

Abstract

Why do shoppers spend more money on unhealthy food when they make cashless payments? We propose that negative arousal elicited by monetary payment plays a role in such consumption. Cash payments increase this negative arousal, which increases attention to decision risks. In contrast, cashless payments reduce this negative arousal, and thus reduce attention to decision risks. By reducing attention to decision risks, cashless payments can increase risky consumption behaviors. Two experiments test this decision-risk inattention hypothesis in the context of vice food (i.e., hedonic food with health risks). Study 1 demonstrates that cashless payments reduce negative arousal measured through skin conductance, and increase purchase intentions of vice food. Study 2 shows that the effect of cashless payments is stronger for shoppers who are more sensitive to health risks.