Wealth Effect
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
When the book value of people's assets (such as stocks, real estate) rises, even if they have not cashed out, they feel richer and increase consumption; conversely, they decrease consumption. Scaffolding role: It reveals the driving force of book illusion on behavior. When managing expectations, making employees or users feel that they are 'appreciating' (even if it's just points or titles) can significantly boost their activity and engagement.
SCAFFOLDING EFFECT
Reduce cognitive load
It reveals the driving force of book illusion on behavior. When managing expectations, making employees or users feel that they are 'appreciating' (even if it's just points or titles) can significantly boost their activity and engagement.
Anchor fast decisions
An increase in the book value of assets enhances subjective wealth perception, stimulating consumption; a decrease suppresses consumption. Behavior is driven by 'book illusion', regardless of whether assets are liquidated.
MINIMUM ACTION
In progress 0/4Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Wealth_effectverified
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