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.

Related Biases

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
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  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
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About the Authors

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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.

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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.

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