Understanding the User's Economical and Psychological Intentions to Snatch Electronic Red Envelopes: An Experimental Study

Abstract

As a new social phenomenon occurring during the Spring festival in recent years in China, snatching 'WeChat red envelopes' fever has swept the country. The high popularity of WeChat red envelopes is unusually interesting because of individuals' behavior reflects a trade-off between concerns for the economic consequences and the psychological consequences. Why people prefer to WeChat red envelopes rather than cash envelopes, even when the latter delivery higher economic benefits? Understanding some of the rules governing customers' decision making that affect their preferences regarding the WeChat online red envelopes activities is meaningful. This paper documents the motivations of people for receiving and giving WeChat red envelopes. It constructs and tests four hypotheses to explore these motivations. Three studies are then conducted, which show that the individuals' motivations to snatch red envelopes are influenced by luck-chasing preference, mental accounting effect, motivating-uncertainty effect, and reference dependence. Specifically, individuals tend to pay more attention to the psychological consequences than that to the economic consequences of snatching WeChat red envelopes. Based on these results, theoretical and practical implications are provided.