What is it about?
This paper examines how people decide whether to borrow money from someone they know, like a family member or friend, or use a market option, like a credit card. Borrowing isn’t just about the cost—it’s also about the relationships involved. The study reveals that when borrowing from someone feels socially awkward, like asking a coworker or boss, people are more likely to pay the higher financial cost of using a credit card. Conversely, when credit cards have high interest rates, borrowing from a loved one becomes more appealing, even if it could affect the relationship. Through experiments, the research shows that financial and social considerations are deeply connected. For example, people are less concerned about damaging relationships when market borrowing is expensive, and they’re less price-sensitive when interpersonal borrowing doesn’t feel socially appropriate. These findings highlight the complex trade-offs we navigate when making financial decisions that involve both money and relationships.
Featured Image
Photo by 2H Media on Unsplash
Why is it important?
This paper is unique because it integrates the worlds of personal finance and social relationships, showing how they influence each other in surprising ways. It moves beyond the idea that people choose based solely on financial cost or social appropriateness and demonstrates how these factors interact. The research also provides a fresh perspective on borrowing behavior, particularly in situations where people must navigate both personal connections and market options. It’s timely because access to credit and informal borrowing are increasingly intertwined in modern life. As credit options expand and economic pressures grow, understanding the social dynamics behind borrowing decisions can help families, lenders, and policymakers design more thoughtful financial solutions.
Perspectives
This paper captures the emotional and social dimensions of borrowing, which are often overlooked in discussions about personal finance. The idea that borrowing decisions are shaped not just by dollars and cents but by the social roles and expectations attached to relationships feels deeply human. It’s a reminder that financial decisions are rarely as rational as we might think—they’re embedded in our social worlds. I also found the findings about role mismatching fascinating. Borrowing from a parent might feel natural, but borrowing from a boss? That changes the dynamic entirely. This research not only explains why we make these choices but also pushes us to think about how financial systems can better account for the complexity of human relationships. It’s a great example of how sociology can illuminate everyday decisions and help us understand the deeper forces at play.
Dr. Adam Hayes
University of Lucerne
Read the Original
This page is a summary of: Deciding between Domains: How Borrowers Weigh Market and Interpersonal Options, Social Psychology Quarterly, August 2022, SAGE Publications,
DOI: 10.1177/01902725221108964.
You can read the full text:
Contributors
The following have contributed to this page
