How do our sentimental feelings for the past influence our actions in the present?

Nostalgia Effect

, explained.
Bias

What is the Nostalgia Effect?

Feelings of nostalgia, or sentimentality for days gone by, lead us to place increased value on social connectedness and less value on saving money. Nostalgia’s influence over our willingness to spend money is referred to as the nostalgia effect.

Where this bias occurs

Alex is being careful with their money and is working towards their long-term goals of buying a house, having a nice car, and living a comfortable lifestyle. They are avoiding spending money on anything that isn’t essential. Then, one day, Alex is watching television and sees an advertisement that depicts a family on vacation at a national park. They’re shown hiking beautiful trails, swimming in lakes, and laughing together over dinner back at their hotel. This commercial takes Alex back to their childhood, when they used to go on family vacations to national parks. Some of their fondest memories are of exploring the trails with their siblings. Suddenly, Alex has the urge to plan a vacation with their friends. They could rent a cottage and spend the weekend hiking, swimming, and enjoying each other’s company. After all, Alex reasons, it’s more important to make memories than it is to save money. In this case, the nostalgia Alex experienced while watching the commercial depicting a family vacation made them more willing to spend money in the name of social connectedness, despite the fact that they had been being very mindful of their spending.

Sources

  1. Lasaleta, J.D., Sedikides, C., and Vohs, K.D. (2014). Nostalgia Weakens the Desire for Money. Journal of Consumer Research. 41(3), 713-729. DOI: 10.1086/677227
  2. See 1
  3. See 1
  4. See 1
  5. See 1
  6. Freidman, L. (2016). Why Nostalgia Marketing Works So Well With Millennials, And How Your Brand Can Benefit. Forbes. https://www.forbes.com/sites/laurenfriedman/2016/08/02/why-nostalgia-marketing-works-so-well-with-millennials-and-how-your-brand-can-benefit/#6f797d336364
  7. See 1

About the Authors

A man in a blue, striped shirt smiles while standing indoors, surrounded by green plants and modern office decor.

Dan Pilat

Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.

A smiling man stands in an office, wearing a dark blazer and black shirt, with plants and glass-walled rooms in the background.

Dr. Sekoul Krastev

Sekoul is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. A decision scientist with a PhD in Decision Neuroscience from McGill University, Sekoul's work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.

About us

We are the leading applied research & innovation consultancy

Our insights are leveraged by the most ambitious organizations

Image

I was blown away with their application and translation of behavioral science into practice. They took a very complex ecosystem and created a series of interventions using an innovative mix of the latest research and creative client co-creation. I was so impressed at the final product they created, which was hugely comprehensive despite the large scope of the client being of the world's most far-reaching and best known consumer brands. I'm excited to see what we can create together in the future.

Heather McKee

BEHAVIORAL SCIENTIST

GLOBAL COFFEEHOUSE CHAIN PROJECT

OUR CLIENT SUCCESS

$0M

Annual Revenue Increase

By launching a behavioral science practice at the core of the organization, we helped one of the largest insurers in North America realize $30M increase in annual revenue.

0%

Increase in Monthly Users

By redesigning North America's first national digital platform for mental health, we achieved a 52% lift in monthly users and an 83% improvement on clinical assessment.

0%

Reduction In Design Time

By designing a new process and getting buy-in from the C-Suite team, we helped one of the largest smartphone manufacturers in the world reduce software design time by 75%.

0%

Reduction in Client Drop-Off

By implementing targeted nudges based on proactive interventions, we reduced drop-off rates for 450,000 clients belonging to USA's oldest debt consolidation organizations by 46%

Notes illustration

Eager to learn about how behavioral science can help your organization?