Challenging the Thrift Paradigm: When Decreasing Income Trajectory Drives Expensive Non-Conformity

In an increasingly complex modern social information environment, in which consumers are exposed to both changes in economic conditions and pervasive social comparison cues, there remains limited research exploring the relationship between financial anticipation, social signals, and consumption choices. Using an experimental approach, we examine how income trajectories and social information shape consumption choices. Participants in our online decision task were randomly exposed to information indicating either increasing or decreasing income trajectories, alongside social information about the popularity of a relatively cheap or expensive choice of a specific type of product, among individuals with the same income trajectory. Firstly, we find that cheap information during economic decline undermines the standard prediction that anticipated income decline leads consumers to prefer cheaper products. Specifically, the results suggest a significant non-conformity effect specific to the scenario of anticipated income decline: when income was expected to decrease and the social information indicated a majority choice of cheap products, participants were more likely to select the expensive products. On the other hand, social information had no significant impacts when income was expected to increase. Our findings challenge the conventional intuition that social information indicating a cheap majority encourages frugal consumption, instead suggesting a counter-conformity pattern under anticipated income decline.