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Grandiose, Narcissistic, Impulsive E-Personalities — and What They Might Do to the Economy
2:10 PM Monday February 7, 2011
Consumers have long been famous for wishing they could keep up with the Joneses, but in the past decade they've gained even nearer neighbors with a habit of spending beyond their means — their own, online alter egos. As the Internet and related technologies have turned money into an even less tangible and further removed concept than the plastic of credit cards, the result may be a new and largely unacknowledged contributor to our economic woes.
Is it possible that the Great Recession of 2008-2010 might have something to do with our coming of age as virtual creatures? My research shows that, online, we take on new character traits that add up to a full-fledged "e-personality" — a disinhibited way of behaving and transacting that can be very different from how we have always operated. E-personality traits found in our online alter egos include grandiosity, or the sense that sky is the limit when it comes to what we can accomplish; narcissism, or how we tend to think of ourselves as the center of the World Wide Web; and impulsivity, or the urge-driven lifestyle many of us are falling into. As a consequence of adopting these traits, we feel more potent, special, and spontaneous. There is something very empowering about these qualities, which helps blind us to their consequences. When it comes to online spending, for example, the effects become less near and concrete. Fueled by grandiose, narcissistic, and impulsive notions, it is easier online to feel as special, deserving, and immune to bankruptcy as a Marie Antoinette — and to shop accordingly.
The Internet, which helps us create these alter egos, also gives us the illusion that Amazon is our shortcut to becoming larger than life. In a 2007 study led by psychologist Helga Dittmar, researchers recruited 126 online shoppers. Using a scientifically validated scale to find the dysfunctional Internet shoppers among them, they determined that nearly 10% met criteria for compulsive online shopping. The researchers then set out to understand what prompted the pathological shoppers' online sprees. Was it the economic benefit made possible through the ease of price comparisons online? Was it the efficiency and convenience of not having to go to the store? The results showed that neither of these factors triggered compulsive online buying — people didn't shop compulsively online because it was easier and less time-consuming than going to the store, or in order to save money. Instead, the clear trigger was the prospect of an identity gain — the possibility of feeling grander than one's old self. Compulsive shoppers tended to shop online because they thought it got them closer to an ideal image that they were chasing. As the study authors put it, "Individuals appear motivated by self-improvement and self-repair ... and moving closer to an identity ideal." As a result, Dittmar and her colleagues suggest that as a society we make efforts to increase awareness of the psychological and financial pitfalls of impulsive online buying through education and consumer advice and, for some, through psychotherapy.
Psychotherapy for your e-tail therapy? It wasn't supposed to turn out that way. A decade ago, it was thought that the Internet would render buying more rational by dispensing wiith the marketing distractions of traditional stores, facilitating price and product comparisons, and freeing us from time pressure. Instead, we find ourselves in a virtual bazaar where we have out-of-control alter egos to contend with, and where buying transactions are so remote from handing over cash or even credit cards that it no longer feels like spending. And so we spend more.
That is why one has to wonder about the role of what I have called "virtualism" (in contrast to realism) in the devastating real estate bubble and ensuing Great Recession. It is worth noting that four of the top-ten online advertisers in 2007 sold mortgage services and that countless websites were in the business of encouraging consumers, including those with marginal credit histories, to bid on properties they could not afford. All of a sudden, many who should have known better became easy prey to "zip zero zilch nada no down payment required" popups on websites such as zerodownloan.com. All of a sudden, too many of us were looking for second homes to "flip," in a bout of irrational exuberance that recalls the heady days of another bubble (and one that was clearly Internet-mediated).
This, too, can be seen as a manifestation of grandiose thinking, one that online life, by making us allergic to gravity and anything that holds us back, may have helped facilitate. After all, owning a virtual home is relatively painless: All you need to build your Second Life dream house is borrow a few Lindens, the Second Life currency. Should you default on your loan, the most painful outcome possible is that your Second Life subscription might get canceled.
They call it "real" estate for a reason, yet many of us approached first, second, and vacation homes as though they were virtual property, castles we built in the sky. Debt stopped scaring us because money had stopped being real. The "correction" that has followed is surely very painful, but only as painful as the buying binge that preceded it was unhinged from reality.
Still, the road from Amazon's "one-click option" to credit default swaps involves major leaps of faith. The reasons for our fiscal predicament are not agreed upon by economists, let alone psychiatrists. But the idea that the Internet has contributed by making money virtual and more abstract than ever before deserves serious consideration. For the obscene living-beyond-our-means that characterized the most recent bubble, and the two trillion dollars that subsequently evaporated, are experiences in unreality that may have more in common with Linden dollars than with any currency or economic model invented before them.