When consumers believe humanized “Lady Luck” shares the risk, UofL research shows it can lead to risky financial choices

LOUISVILLE, Ky. – When people believe that a humanized “Lady Luck” shares risk with them, they may be more likely to make risky financial decisions, according to a new study published in the Journal of the Association for Consumer Research by a University of Louisville researcher and others.

Katina Kulow, assistant professor of marketing in the UofL College of Business, and co-authors reveal in “Lady Luck: Anthropomorphized luck creates perceptions of risk-sharing and drives pursuit of risky alternatives,” that when consumers give luck human characteristics, it can provide a sense of security and shared risk when it comes to financial decisions.

“This sense of shared risk can make those individuals more likely to pursue higher-risk financial behavior, such as purchasing lottery tickets with worse odds or investment opportunities with a low chance of return,” Kulow said. “Such decisions could have significant negative consequences for consumers' financial and psychological welfare.”

In four experiments, Kulow and co-authors Thomas Kramer and Kara Bentley used a series of online surveys to assess individuals’ risk perceptions and decisions involving financial risk, such as a lottery or startup investments.

The authors found that when consumers attributed human qualities to luck, they more often preferred higher-risk alternatives when making financial decisions. On the other hand, when the situation involved risk of social capital (goodwill, trust and influence), participants responded as though they perceived they had more control over outcomes and felt less in need of the security provided by an anthropomorphized entity.

These results may be useful when considering public policy decisions, such as whether marketers may be required to qualify references to anthropomorphized luck, particularly when consumers may be vulnerable to taking undue financial risks, such as in gambling establishments. A sign in a casino that reads “Lady Luck is on Your Side,” for example, could lead gamblers to engage in higher-risk behaviors than a sign reading "Luck is on Your Side" or "Good Luck." Or, limiting the use of “lady luck” on lottery scratch-off tickets could prevent devastating financial losses among lower socioeconomic status consumers.

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