Money talks - Economic decisions in close partnership relationships

Vienna (FWF) – Partners in close relationships are often at odds when it comes to financial matters. The economic decisions of couples are dynamic processes, in which the daily routine of the relationship plays an important role. Sponsored by the Austrian Science Fund (FWF), Erich Kirchler and his team from the Institute of Psychology of the University of Vienna asked 40 couples to keep a so-called decision diary of various incidences and mechanisms, the entries of which he subsequently analysed and evaluated.

Economic decisions are preceded, accompanied and followed by a large number of different activities between two partners, influencing the dynamics of the financial decisions. The entire interaction between the partners must be taken into account for a comprehensive investigation of such decision mechanisms. Erich Kirchler asked 40 couples living in close relationships to keep a "partner incidence diary" for the period of one year, in which both partners daily recorded one or several situations in detail. Kirchler explains two fundamental findings of the project: "Everyday decisions, also in financial matters, reflect the quality of a relationship. The dynamics of joint decision-making determines the quality of a partnership". In partnered relationship systems the solution of financial questions is directly related to other everyday conflicts, such as problems with the children, leisure time, job, household work and the partnership itself. Economic decisions are
generally taken by the partner who knows more about the particular circumstances and who attaches greater importance to the decision. Relative contributions to the partnership, such as money, status or a reputable job, are of minor importance.

Some results of Kirchler's study surprisingly show how often "psycho-logical" aspects instead of "logical-objective" ones can lead to sub-optimal decisions. The researcher found out, for instance, that in some decisions, even in important ones, the partners lost sight of the actual objective and finally decided on an issue that had not been under discussion at the beginning. Sometimes different aims are followed in the decision-making process and economically reasonable solutions are preferred to others: Partners, irrespective of the issue, tend to make concessions if they had the last word in past decisions. While striving for a reasonable economic decision, the partners must also
"regulate" their relationship. In addition to objective discussions, a wide range of, often emotional, tactics is used to induce the partner to compromise. Kirchler and his team spotted a total of 18 different tactics that partners use in the decision-making process. Kirchler has already published his results in two books - "Liebe, Geld und Alltag“ ("Love, Money and Everyday Life") and "Conflict and Decision Making in Close Relationships“. In these publications he deals, among other things, with the perceived fairness and satisfaction with a decision.

Univ. Prof. Dr. Erich Kirchler
University of Vienna, Institute of Psychology
T + 43 1 4277 47880