Online Shopping

PALO ALTO, Calif. - We may have spent the last few decades trying to keep up with the Joneses, but we are now busy keeping up with our online alter egos - and the Joneses suddenly seem frugal.

The Internet and related technologies have turned money virtual, an even less-tangible and further-removed concept than the plastic of credit cards often blamed for our reckless out-of-touchness with finances. The result may be a new and largely unacknowledged contributor to our economic woes.

The Great Recession of the last couple of years may also have to do with our coming of age as full-fledged virtual creatures, no longer moored in reality and no longer beholden to old truths and rules, including economic ones. Online, we take on new character traits that add up to a complete "e-personality" - a disinhibited way of behaving and transacting that can be very different from how we have always operated.

E-personality traits to be found in our online alter egos include grandiosity, or the sense that the sky is the limit when it comes to what we can accomplish and how much we think we can afford; narcissism, or how we tend to think of ourselves as the center of the World Wide Web, deserving of all the pampering money can buy; and impulsivity, or the urge-driven, click-now-worry-later lifestyle many of us are falling into online. As a consequence of adopting these traits, we feel more potent, entitled, and spontaneous.

These traits are empowering, which helps blind us to their consequences. When it comes to online spending, the effects become less near and concrete. Fueled by grandiose, narcissistic, and impulsive notions, we find it easier, online, to feel as special and immune to consequences as a Marie Antoinette - and to spend accordingly. Outcomes like default or bankruptcy stop scaring us because they stop being real.

The Internet, which helps us create larger-than-life alter egos, also gives us the illusion that Amazon and eBay are our shortcut to it. In a 2007 study led by British psychologist Helga Dittmar, researchers recruited 126 online shoppers. Using a scientifically validated scale to find the dysfunctional Internet shoppers among them, they determined that nearly 10 percent met criteria for compulsive online shopping. The researchers then set out to understand exactly what prompted the pathological shoppers' online sprees.

Was it the economic benefit made possible through the ease of price comparisons online? Was it the efficiency and convenience of not having to go to the store? Or was it identity gains and the possibility of feeling grander than one's old self through buying goods online?

The results showed that economic benefit and efficiency did not trigger compulsive online buying - people didn't shop compulsively online because it was easier and less time-consuming than going to the store, or in order to save money.

By contrast, identity gains were clear triggers, in that compulsive shoppers tended to shop online specifically because they thought it got them closer to an ideal image that they were chasing: "Individuals appear motivated by self-improvement and self-repair ... and moving closer to an identity ideal."

The study's authors advocate that as a society we increase awareness into the psychological and financial pitfalls of impulsive online buying through education and consumer advice and, for some, through psychotherapy.

Psychotherapy for your e-tail therapy? It wasn't supposed to turn out that way. A decade ago, it was thought that the Internet would actually encourage responsible buying by avoiding the marketing distractions of traditional stores, facilitating price and product comparisons, and freeing us from time pressure. And recent apps such as ShopSavvy, RedLaser, and Milo have turned bargain hunting into an exact science.

A good deal may be easier to track down than ever, but none of this seems to matter if we are in a virtual bazaar with an out-of-control alter ego to contend with, and where the buying transaction is so remote from handing over cash or even a credit card that it no longer feels like spending. And so we spend more.

That is why one has to wonder about the role of what I have called "virtualism" in the devastating real estate bubble and ensuing Great Recession. It is worth noting that four of the top-10 online advertisers in 2007 sold mortgage services and that countless websites were in the business of encouraging consumers, including those with marginal credit histories, to bid on properties they could not afford.

All of a sudden, many of us who should have known better became easy prey to "zip zero zilch nada no down payment required" pop-ups on websites such as zero downloan.com. All of a sudden, too many of us were looking for second homes to "flip," in a bout of irrational exuberance that recalls the heady days of another bubble (and one that was clearly Internet-mediated).

This, too, can be seen as a manifestation of grandiose thinking, one that online life, by making us allergic to gravity and anything that holds us back, may have helped facilitate. After all, owning a virtual home is relatively painless: If you subscribe to Second Life (an online virtual world developed by Linden Lab and launched in 2003), all you need to build your dream house is borrow a few Lindens, the Second Life currency. Should you default on your loan, the most painful outcome possible is that your Second Life subscription might get canceled.