Understanding the Diderot Effect to Overcome Overspending
As a student of financial behaviour for over 20 years, I am always impressed with a phenomenon that can be expressed succinctly and explains our motivations broadly. This article describes the Diderot Effect – the way in which one purchase can beget another. The author uses examples from home decorating, car purchases and fashion and with consumption surpassing pre-pandemic levels in many of these areas, it is worth exploring to see if you identify with it too. Furthermore, with the holiday season soon upon us, facing our own spending behaviour might just save us a few dollars.