Consumer and investor decision-making under psychological pressure

Consumers and investors face various psychological pressures designed to trigger hasty decision-making. In the financial markets, retail investors often struggle with overtrading and attempting to time the market. Research cited from The Journal of Finance indicates that highly active traders often underperform the market due to excessive confidence and emotional decision-making.

Similarly, in e-commerce, retailers use pressure tactics such as countdown timers, claims of low stock, and crossed-out prices to create a sense of urgency. An investigation by the European Commission into Black Friday and Cyber Monday practices found that 18 percent of checked retailers used pressure techniques, with over half of those cases deemed misleading. Additionally, 34 percent of retailers displayed price comparisons, but 60 percent of those failed to clearly explain the origin of the original higher price.