In the animal kingdom, males of certain species possess flashy ornamentation that appears to do little to enhance their survival; think of a peacock's long, heavy tail or a cardinal's eye-catching red feathers. Similar signals can be seen in the human population. A luxury car or watch, for example, may not-so-subtly convey the message that the owner has money and is not afraid to spend it.
New findings from the largest study of its kind, led by Gideon Nave, an assistant marketing professor at the University of Pennsylvania's Wharton School, underscore a biological factor at play in the choice of products conveying status: testosterone. Giving men a single dose of testosterone increased their preference for higher-status goods.
The study supports previous research that connects transient increases in testosterone levels to a rise in behaviors aimed at boosting social rank.
"We found a small but consistent effect on preferences," Nave says. "The findings need to be replicated, but we used a sample size that is four or five times larger than what has been used before, so we have more evidence than we've ever had that testosterone is affecting these preferences."
While the study, published in Nature Communications, measured the participants' preferences and positive attitudes about products, not actual purchases, Nave says that the findings serve as a foundation for forecasting consumer behavior.
In evolutionary biology, the presence of seemingly impractical ornaments such as the peacock's tail or a stag's bulky antlers are explained by what's known as the handicap principle. While these displays would seem to diminish an animal's fitness, they serve to increase their attractiveness to a potential partner, as they suggest an individual has resources to spare and can thus afford to fritter away some on a frivolous investment.
"The idea is these things are actually handicaps that the animals put on themselves," Nave says, "and by having them the animals show they are sufficiently fit to have these handicaps."
One needn't look far to find the same patterns in humans. A luxury product, say, a fancy watch, tells the same time as an inexpensive digital one but also carries with it a signal of social status.
"In some ways this is similar to someone driving a limo or a Hummer or a Ferrari," says Nave. "It's a way of showing or signaling that you can afford to do so."
With a background in neuroscience and as a member of the Wharton Neuroscience Initiative, Nave uses the tools of biology and marketing to understand how people make decisions. A paper he published last year found that a single dose of testosterone, a hormone that regulates a variety of behaviors related to reproduction, caused men's performance on a test of decision-making ability to worsen.
Other researchers, meanwhile, have linked testosterone to status-enhancing behaviors in men, but previous studies had been conducted using small groups and in some cases hadn't explicitly examined the link to preference for status goods.
The current study was double-blinded and randomized and used a larger sample size than earlier efforts, 243 men ages 18-55. Each participant received a gel to apply to his upper body; some gels contained testosterone and others a placebo.
In one task, participants were shown two logos of apparel brands selected to match their perceived quality but differ in status, for example, higher-status Calvin Klein versus lower-status Levis. Those who received a dose of testosterone were significantly more likely to prefer the higher-status brands.
The second task presented participants with descriptions of certain goods, such as watches, coffeemakers, and sunglasses, as either power-enhancing, status-enhancing or high-quality and asked about their attitudes toward the products. Here, too, men who received a testosterone boost were more likely to express positive feelings about the items described as status-enhancing, though there was no difference between the groups when the goods were described as power-enhancing.
"We were trying to disentangle power from status," Nave says. "Typically in the animal kingdom they go together, but you can think of examples in human society where they don't. For example, a border patrol agent has a lot of power but not status. And a famous climate scientist may have a lot of status but little power."
Nave notes that testosterone naturally rises in men in certain contexts, such as during and after sporting events, or subsequent to major life events like a graduation or divorce. Marketers could take advantage of these oscillations to tailor their marketing strategies to these individuals. In addition, because such status-seeking behaviors can exacerbate inequality if someone overspends on a status item when they can't afford it, further understanding of the biological drivers of the behavior could prove useful.
Nave was lead author on the study. His coauthors were Amos Nadler of Western University, David Dubois and Hilke Plassmann of INSEAD, David Zava of ZRT Laboratory, and Colin Camerer of the California Institute of Technology.
The study was supported by INSEAD Research and Development funds, the MacArthur Foundation, the Ivey Business School, the International Foundation for Experimental Economics, the Russell Sage Foundation, the Wharton Neuroscience Initiative, and the Wharton-INSEAD alliance.