The present article introduces the concept of consumer spinning. This occurs when consumers have lost track of their initial motivation to consume and engage unwittingly in hamster-like spinning in a “wheel of misfortune”, being encouraged to spend through sweetheart deals and thus incur debt without even realizing it. This article takes for example the Global Financial Crisis of 2007-2009 (GFC) during which the use of such sweeteners by sellers of predatory mortgages and advocates for lax regulations led U.S. consumers to spin and, in the process, ignore the debt trap they were falling into. We discuss the results of a functional magnetic resonance imaging (fMRI) experiment we conducted to test the ratio of greed over risk aversion and the hypothesized phenomenon of spinning. We believe that this is the first academic attempt to examine spinning resorting to an experimental tool used regularly in neuroscience and psychology research. Our framework indicates that government regulators should take the role of marketing sweeteners into account when devising policies. Marketing managers, who strive to educate consumers and help them reduce their debt load, thus promoting better purchasing power, stand to benefit from an understanding of these possible spinning behaviors and adapt their campaigns accordingly. We believe that there should be legal consequences for encouraging consumer spinning, as this at times may be an intentional and deceitful invitation for consumers to harm themselves financially.

The present paper examines decision making during market bubbles. In the context of high market volatility, high speculation and inappropriate regulation (e.g., as such was the case in the years prior to the 2008 subprime crisis), market agents adopt either a predator or prey position. By way of a neurobiological study, it is shown that market-agent-turned preys benefit from moderate stress when it enhances their level of vigilance; however, past a certain stress threshold, their efforts at wealth maximization are considerably reduced. This may explain some of the cognitive causes of failures found by various authors in their description of the market bubble phenomenon. The paper emphasizes the importance of setting up proper regulations aimed at preventing the emergence of predatory behaviors (such as those that prevailed with the establishment of predatory mortgages during the year 2000 in the United States) and better educating average investors.

In this challenging and innovative article, we propose a framework for the consumer behavior named “consumer financial spinning”. It occurs when borrowers-consumers of products with high financial stakes accumulate unsustainable debt and disconnect from their initial financial hierarchy of needs, wealth-related goals, and preferences over their household portfolio of assets. Three behaviors characterize daredevil consumers as they spin their wheel of misfortune, which together form a dark financial triangle: overconfidence, use of rationed rationality, and deceitfulness. We provokingly adapt some of the tenets of the Markowitz and Capital Asset Pricing models in the context of the predatory paradigm that consumer financial spinning entails and use modeling principles from the data percolation methodology. We partially test the proposed framework and show under what realistic conditions the relationship between expected returns and risk may depart from linearity. Our analysis and results appear timely and important because a better understanding of the psychological conditions that fuel intense speculation may restrain market frictions, which historically have kept reappearing and are likely to reoccur on a regular basis.