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How trust in financial supplier information impacts young adults' financial information involvement: The moderating roles of product savings risk and social norm: The impact of trust, risk and social norm on young adults' financial involvement
Abstract
Although consumers' risk-taking, supplier trust, social norms and information involvement are central to much of thought in the financial market and consumer economic literature, it is not known how the interplay between consumers' trust in supplier information, risk-taking behaviour and social norm may influence information involvement. This research contributes to the consumer economic literature by investigating how product savings risk and social norm affect the relationship between young adults' trust in supplier information and their information involvement. On the basis of two samples with young adults who recently have purchased a low-risk savings product (n = 641) and a high-risk savings product (n = 219), respectively, several results are obtained. It is found that both product savings risk and social norm positively moderate the relationship between young adults' trust in supplier information and their information involvement. In addition, the results indicate that the three-way interaction between trust in supplier information, products savings risk and social norm has a positive effect on information involvement. As direct implications, financial authorities and financial service managers should especially consider investing additional resources in developing information trust for high-risk savings products and should also take social norms into account when considering young adults' high-risk-taking behaviour. Copyright © 2017 John Wiley & Sons, Ltd.
... Thus, contemplating medical treatment in the context of treatment outcomes provides us with an ideal example of a complex risk. However, the little research that has been conducted on the perception of risk and concern about uncertainty has mainly examined them with respect to the risks of nuclear power, climate change and earthquakes (Hansen, 2017;Vainio et al., 2017;Visschers et al., 2011). We do not know how communication and treatment outcomes shape patients' risk perception and concern about uncertainty. ...
... It is important that similar results emerged in both the experimental and field studies, as the strengths and weakness of each study compensate for each other. The interaction effect of treatment outcomes with the communication of information between patients and doctors, which is central to these studies, is similar to the results of research on financial risk and trust in financial authorities (Hansen, 2017). The results of our studies indicate that the level of communication may dictate the treatment-outcome interaction. ...
Aim
The aim of the study was to examine whether patient–provider communication interacts with treatment outcomes to influence patients' risk perception.
Background
Medical uncertainties and risks are among the most serious problems faced by patients. This is exacerbated by communication failure in patient–provider relationships and poor treatment outcomes. However, we do not know how communication and treatment outcomes shape patients' risk perception and concern about uncertainty.
Design
The study is a two‐by‐two between‐subjects design.
Methods
Two studies were conducted and data were collected in 2019. Each study used a different research design and different samples: Study 1 used a scenario experiment with 120 undergraduate students; and Study 2 surveyed 200 inpatients in clinical settings.
Results
The convergent results found a significant interaction between patient–provider communication and treatment outcome on the perception of medical risks among the participants.
Conclusion
Patient–provider communication interacts with treatment outcome to influence patients' perceived risk about uncertainties for healthcare. Clinicians and nurses should be aware of the effects of patient–provider communication on patients' risk perception in their concerns about the uncertainties of treatment and pay much more attention to good healthcare relationship building in addition to the improvement of objective treatment outcome.
... Research has acknowledged the importance of technologies for building trust across various industries, including financial services (Bugandwa et al., 2021;Van der Cruijsen et al., 2021;Gyamfi, 2019;Kosiba et al., 2020;Hansen, 2017). Although technological advancements may boost customer trust in financial services, products, and systems, linkage warrants a deeper investigation, particularly an examination of the roles for policy and regulatory activity in building trust. ...
Technological innovations that increase trust in the financial sector can drive financial growth. Using Ghana as a case study, this study reviewed technology-focused policies, strategy documents, and peer-reviewed literature to assess how financial technology is being utilized to build trust in financial institutions. The literature search revealed that two categories of technological applications are being used to build trust: payment platforms and trade and investment technologies. The findings showed that Ghana has adopted wide-ranging initiatives to build trust—for example, the National Digital Property Addressing System, the Re-registration of SIM Cards, and the passage of the Data Protection Act (Act 843 of 2012). We also identified key challenges associated with leveraging technologies in the sector. Valuable for financial institutions, academics, practitioners, and other financial-sector actors, the insights from this study could enhance policy formulation and implementation across other jurisdictions.
... On the one hand, financial literacy can change households' risk attitudes and prevent them from falling into poverty by choosing financial instruments such as insurance and credit for risk protection when facing external risks (Urrea and Maldonado, 2011;Kwon and Ban, 2021). On the other hand, through information analysis and screening of financial products, increasing social trust (Hansen, 2017) and risk-taking capacity (Hong et al., 2020), for example, by increasing households' willingness to purchase financial insurance, the insurance mechanism will work to help households diversify their risks when they are covered by insurance and other protection, thus reducing the probability of falling into poverty in the future. Based on this, this paper proposes the following hypothesis: ...
Financial literacy is the significant human capital factor affecting people's ability to obtain financial services. Evaluating the relationship between financial literacy and relative poverty is of great significance to poverty reduction. This study investigated the impacts of financial literacy on relative poverty from the perspective of poverty psychology and market participation using data from the 2017, 2019 China Household Finance Survey (CHFS). The empirical findings showed that financial literacy can alleviate relative household poverty through household participation in entrepreneurial activities, commercial insurance participation and the choice of lending channels. Financial literacy has significant poverty reduction effect on households of continuous operation, reduces the likelihood of exiting operation. Further discussion showed that the poverty reduction effect of financial literacy is more pronounced among households with higher levels of financial literacy, under the age of sixty, low levels of indebtedness and in the eastern region. Our study provides empirical evidence for encouraging market participation and promoting financial literacy and provide valuable recommendations for the policymaker to improve poverty reduction effect in the developing country context.
... This type of situational involvement (i.e., purchase involvement) is temporarily established, which can also increase their trust toward retailing (Sanchez-Franco, 2009). Although several scholars have argued that trust considerably influences consumer involvement in trusted partners, such as financial companies (Chen et al., 2016;Hansen, 2017) and trading partners (Li, Li, & Feng, 2015), the reverse direction (i.e., the effect of involvement on trust) deserves more attention to a lack of initial trust. ...
Purpose: Customer trust toward e-commerce has been unsettled by recent unethical events. Involvement, the level of personal relevance of an object or event, has been proved to enhance trust. Nevertheless, in a complicated online shopping environment, the relationship between involvement and trust might undergo changes. Therefore, this study aims to investigate how consumer involvement can be translated into trust that is crucial to the success of online transactions in such a confusing setting.
Design/methodology/approach: This study explores the relationships between involvement (i.e., purchase and product involvement) and trust (i.e., trust in e-vendors, retail websites and brands). This study also tests the moderating effects of confusion on the purchase involvement–trust relationship. Using 570 effective samples randomly collected in Guangdong, China, this study employed structural equation modelling to test a proposed hypotheses.
Findings: The results show that purchase involvement has a negative impact on trust in e-vendors, retail websites and brands, whereas product involvement demonstrates a positive effect. Moreover, confusion reinforces the negative relationship between purchase involvement and trust in e-vendors.
Practical implications: To increase customer trust, marketers should invite regular customers to recommend their products and services, become associated with e-service providers and brands and design distinct logos, slogans and advertising styles.
Originality/value: This paper explores the direct effect of involvement on trust in multiple online contextual situations (e.g., platforms, brands and e-vendors), as well as the moderating effect of confusion on the involvement–trust relationship.
The objective of the paper is to examine determinants of the extent of usage of accounting information by the Public Accounts Committee in Tanzania public corporations moderated by effective communication. This study's guiding theories are an agency, accounting information usefulness, and communication. The study used a positivist philosophy, deductive approach, and cross-sectional survey design. The researcher used quantitative data analysis focused on 110 questionnaires made by PAC members and nonmembers. The Partial Least Square –Structural Equation Modeling [PLS-SEM] was used to support multivariate statistical analysis. The study reported a coefficient of determination (R2) of 0.584, implying that trust in accounting information, perception of quality of accounting information, knowledge of accounting information, and effective communication moderated by effective communication explain a 58.4% variation in the extent of usage of accounting information. The study results showed that trust in accounting information and knowledge of accounting information has a statistically significant positive impact on the extent of use of accounting information. The perception of the quality of accounting information and effective communication had a statistically insignificant positive effect on the extent of accounting information usage. Besides, the study results confirmed the absence of moderating effects of effective communication of accounting information on the relationships between determinants of accounting information usage and the extent of use of accounting information.
This paper proposes a theoretical framework in an attempt to better explain the behaviors of some consumers of financial products during market crises. We review the established notions of irrationality and deception, and then add the construct of disconnection from financial needs, goals, and preferences. We propone that these three concepts, respectively cognitive, behavioral, and emotional in nature, create a dark financial profile by which these consumers unwittingly build debt. We use bibliometrics to highlight the current gap in the scholarly domains of interest and provide market examples of how the dark financial profile likely deploys in the marketplace. This is the first article to employ disconnection in such a context, and to improve the understanding of consumer behaviors in regard to disconnection, irrationality, deception, and debt. Thus, we enrich the literature on debt, which has at times ignored the role of the combination of these constructs. We investigate avenues of research for developing further our emerging framework, especially on the notion of disconnection, and suggest that this effort may assist in preparing effective marketing of financial education programs and improving lending practices. This article is protected by copyright. All rights reserved.
Though the marketing literature acknowledges that communication plays a vital role in channel functioning, it provides no integrated theory for channel communication. The authors build a theoretical model to help understand the role of communication in marketing channels. They propose a contingency theory in which communication strategy moderates the impact of channel conditions (structure, climate, and power) on channel outcomes (coordination, satisfaction, commitment, and performance). When a communication strategy matches the channel conditions, channel outcomes will be enhanced in comparison with the outcomes when a communication strategy mismatches channel conditions.
Purpose
– The purpose of this paper is twofold: first, to investigate the role of perceived risk as a moderator of the key relational mediators of satisfaction and trust, and second, to test the influence of perceived product value and social bonding as antecedents of brand satisfaction and brand trust to understand their effectiveness under different risk conditions. Palmatier et al. (2006) call for the study of moderators of relational mediators, such as trust and satisfaction, which may determine the effectiveness of different relationship marketing strategies.
Design/methodology/approach
– This study investigates business-to-consumer relationships between a car brand and its customers, applying structural equation modeling.
Findings
– Results show that perceived risk moderates the mediating role of both brand trust and brand satisfaction on relationship outcomes. When perceived risk is low, brand satisfaction alone determines brand loyalty, whereas when perceived risk is high, brand trust exclusively determines brand loyalty. Thus, the effectiveness of social bonding tactics as a prime determinant of trust is contingent on consumers’ risk perceptions.
Research limitations/implications
– A limitation of the present research is its focus on one product category. Further investigations should be conducted to expand the findings’ generalizability.
Practical implications
– The often-recommended social bonding between boundary spanner and customers is only an effective relationship marketing strategy in situations of high perceived risk.
Originality/value
– This study clarifies the role of perceived risk in marketing relationships by testing alternative models.
This paper examines whether differences in individual risk attitudes are related to interpersonal conflict. In more than thirty villages of rural Uganda, we conduct a social survey to document social links between pairs of individuals within a village, and separately elicit individual risk attitudes using an incentivized task. Our findings reveal that the difference in risk attitudes between two individuals is significantly and positively related to the presence of interpersonal conflict between them. This relationship is particularly strong among kin. By contrast, the strength of risk aversion per se is not related to conflict. Further, we conduct simulations that suggest that the relationship cannot be solely explained by diverging attitudes after the severing of social ties as a result of interpersonal conflict.
This research demonstrates how service firms can encourage decisions that enhance consumers’ well-being through informational social influence. Specifically, we propose that social information regarding the beneficial behaviors of others is enhanced under a deliberative mind-set. Given the financial insecurity of consumers, as well as the potential for financial services firms to positively affect consumers’ savings decisions, we test this theorizing in the context of savings. Four studies demonstrate that the open-mindedness associated with the deliberative mind-set increases the effectiveness of providing high savings social information (i.e., information about the high savings rates of others). This effect does not occur for consumers with chronically high susceptibility to interpersonal influence, who are open-minded to social information regardless of mind-set, but is stronger for myopically focused consumers who otherwise may be most likely to discount high savings information. Results suggest that financial services firms may improve consumers’ financial well-being by providing high savings social information and eliciting a deliberative mind-set in financial brochures, educational programs, and interactions with financial advisors. Implications for how service firms can utilize a deliberative mind-set and informational influence to enhance consumer well-being by encouraging beneficial behaviors like saving, exercising, or energy conservation, which conflict with existing desires, are discussed.
The period between 15 and 25 years is characterised by much personal change and is the peak age of onset of mental health problems. This prompts an interest in everyday strategies that young people might use to support their wellbeing. Music use is the preferred leisure activity among young people yet little is known about how music is linked to wellbeing in this population. This study aimed to develop and test a model of the relationships between young people’s use of music and their wellbeing, drawing on theories from the music psychology and clinical psychology fields. A qualitative analysis of transcripts from focus groups with 11 participants aged 15 to 25 years revealed four ways in which music listening links with wellbeing: relationship building, modifying emotions, modifying cognitions, and emotional immersion. These linking variables were operationalised using questionnaire scores and tested on a new sample of 107 young people. Results of a multiple mediation analysis revealed that music listening was significantly related to all four linking variables, but not directly related to wellbeing as measured by the Mental Health Continuum. Nevertheless, the four linking variables indirectly mediated the effect of music listening on social wellbeing. The findings are consistent with earlier research on the role of music in emotion regulation and social connection although there are clearly other factors involved in determining young peoples’ wellbeing. These findings will help inform music based interventions for young people.
We measure the effects of motivation and ability on the early career success of a sample of Master's of Business Administration (MBA) graduates in the early years of their careers. We argue that performance is a joint effect of two important individual characteristics: general cognitive ability and motivation. General cognitive ability, which is representative of the general population, refers to individual differences in tasks or pursuits that demand mental effort, such as abstraction, rule inference, generalization, and manipulating or transforming problems. Motivation is conceptualized as a stable mental state that energizes human behavior. Results show that the combination of high general cognitive ability and motivation is significantly associated with more early career success. MBAs who were both smarter and worked harder were more successful in their job search upon graduation, were earning higher salaries, had more rapid pay increases, and received more promotions in their early careers. These findings add to the mounting evidence that studying enduring individual characteristics is critical to predicting behavior.
Although much saving research has been conducted in affluent nations, little is known about consumer saving and well-being at the base of the pyramid, which includes over 3 billion people who live on less than US$2.50 per day. Research evidence suggests that financial situation, and especially saving, is central to well-being in impoverished societies; however, to our knowledge, this relationship has not been tested with a global sample. Thus, in this study, we consider how societal poverty, individual saving ability, and satisfaction with one’s household financial situation influence well-being. Further, we examine how poverty moderates the relationship between individual financial drivers and well-being to test the saving-well-being centrality assumption. Our multilevel study uses hierarchical linear models with about 50,000 consumers across 38 countries and demonstrates that as societal poverty increases, well-being decreases. Yet in high-poverty societies, saving greatly improves well-being. This significant finding among saving, poverty, and well-being is particularly telling, as household financial satisfaction was not moderated by societal poverty. As a result, we suggest novel transformative financial services that should improve the lives of the poor through formal saving mechanisms that are grounded in their lived experiences.
Success rates of behavior change counseling programs (e.g., weight loss, smoking cessation, and debt management), where consumers seek to overcome their destructive habits and enhance well-being, are very low. Characterized by extended and complex service encounters, the providers of these programs face the challenge of gaining consumers' compliance to adhere to the programs' requirements and turning these consumers into effective co-producers of the service outcomes. This study investigates the process of customer organizational socialization in these programs, how it may promote co-production behaviors, and thus enhance consumers' well-being as well as satisfaction with the organization. The context of debt management programs is used to test the model. Data were obtained from 364 clients of a major credit counseling organization in the United States. The results reveal the differential effects of three aspects of socialization (role clarity, task mastery, and goal congruence) on three different types of consumer co-production behaviors (compliance, individual initiative, and civic virtue). Overall, compliance has the greatest contribution to well-being, while both compliance and individual initiative enhance satisfaction with the organization. Furthermore, consumers with a higher or lower ongoing dependence on the organization have different routes to well-being, with the high-dependence group relying on individual initiative, and the low-dependence group favoring compliance. This study contributes to the literature of co-production, organizational socialization, and consumers' well-being by showing how these three streams are connected. Managerial and policy implications focus on the need for these organizations to include efforts to ensure that consumers are effectively socialized into the program.
This article focuses on the key relationship marketing tools of customer service, loyalty/rewards programs, brand/store community, personalization and customization, and their relationship with customer retention. The relationship between customer service, loyalty/rewards programs, customization, personalization, brand/store community and customer retention were examined via an empirical investigation of 450 loyalty/reward program members of three retail stores in Malaysia. The administration of the survey was personally administered but self‐completed. Four of the five relationship marketing tools, namely, customer service, loyalty/rewards programs, brand/store community and personalization, had a significant positive relationship with customer retention. The findings provided valuable insights into the loyalty program management practices of retail stores in a developing country context.
Copyright © 2013 John Wiley & Sons, Ltd.
Though the marketing literature acknowledges that communication plays a vital role in channel functioning, it provides no integrated theory for channel communication. The authors build a theoretical model to help understand the role of communication in marketing channels. They propose a contingency theory in which communication strategy moderates the impact of channel conditions (structure, climate, and power) on channel outcomes (coordination, satisfaction, commitment, and performance). When a communication strategy matches the channel conditions, channel outcomes will be enhanced in comparison with the outcomes when a communication strategy mismatches channel conditions.
Emerging adulthood is proposed as a new conception of development for the period from the late teens through the twenties, with a focus on ages 18–25. A theoretical background is presented. Then evidence is provided to support the idea that emerging adulthood is a distinct period demographically, subjectively, and in terms of identity explorations. How emerging adulthood differs from adolescence and young adulthood is explained. Finally, a cultural context for the idea of emerging adulthood is outlined, and it is specified that emerging adulthood exists only in cultures that allow young people a prolonged period of independent role exploration during the late teens and twenties.
In this article, we provide guidance for substantive researchers on the use of structural equation modeling in practice for theory testing and development. We present a comprehensive, two-step modeling approach that employs a series of nested models and sequential chi-square difference tests. We discuss the comparative advantages of this approach over a one-step approach. Considerations in specification, assessment of fit, and respecification of measurement models using confirmatory factor analysis are reviewed. As background to the two-step approach, the distinction between exploratory and confirmatory analysis, the distinction between complementary approaches for theory testing versus predictive application, and some developments in estimation methods also are discussed.
This study examines college students’ intention to seek information about the H1N1 flu vaccine. We specifically focused on the relationship between trust and affect and whether they work together to influence risk information seeking. Results indicated that positive affect moderated the relationship between trust and information seeking, but negative affect did not. While both positive affect and negative affect influenced risk information seeking, when combined with trust, only positive affect remained as a significant predictor. These results suggest that by understanding the role that trust and affect play, medical professionals and disease control agencies can tailor their communication efforts to increase an individual’s intention to seek information about preventive measures. Specifically, maintaining the public’s trust and positive feelings toward these entities is key to successful communication about prevention measures such as vaccination.
Are men more willing to take financial risks than women? The answer to this question has immediate relevance for many economic issues. We assemble the data from 15 sets of experiments with one simple underlying investment game. Most of these experiments were not designed to investigate gender differences and were conducted by different researchers in different countries, with different instructions, durations, payments, subject pools, etc. The fact that all data come from the same basic investment game allows us to test the robustness of the findings. We find a very consistent result that women invest less, and thus appear to be more financially risk averse than men.
Many companies consider investments in complaint handling as means of increasing customer commitment and building customer loyalty. Firms are not well informed, however, on how to deal successfully with service failures or the impact of complaint handling strategies. In this study, the authors find that a majority of complaining customers were dissatisfied with recent complaint handling experiences. Using justice theory, the authors also demonstrate that customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at the outcomes, and the nature of the interpersonal treatment during the process. In turn, the authors develop and test competing hypotheses regarding the interplay between satisfaction with complaint handling and prior experi- ence in shaping customer trust and commitment. The results support a quasi "brand equity" perspective—whereas satisfaction with complaint handling has a direct impact on trust and commitment, prior positive experiences miti- gate, to a limited extent, the effects of poor complaint handling. Implications for managers and scholars are discussed.
Purpose
The growing importance of relationship marketing has increased interest in the role of consumer trust and loyalty in establishing, developing, and maintaining successful relational exchanges. The aim of this study is first, to examine the differential effects of perceived service quality, trust, and loyalty on repurchase intentions, second, to specify loyalty as a key mediating variable in the consumer‐trust repurchase intentions relationship, and finally, to directly confront the thesis that loyalty is a more powerful determinant of long‐term relationships than trust.
Design/methodology/approach
To test the proposed model in the context of professional services, the authors use data collected from 1,125 customers of a global financial services firm.
Findings
The results highlight customers' willingness to recommend the firm to relatives or friends to be the key driver of customer commitment to the organization.
Research limitations/implications
Although this single‐industry approach may establish the internal validity of the proposed model, replication in alternative service settings is needed to increase the generalizability of the findings. Further research is needed to investigate the longitudinal effects of trust and loyalty on repurchase intentions in professional service contexts.
Originality/value
The findings contribute to understanding of the relationships between different elements of service quality, trust, loyalty, and repurchase intentions; provide critical implications for managers of service organizations; and highlight directions for future research.
The goals of this article are twofold: (a) briefly highlight the merits of residual centering for representing interaction and powered terms in standard regression contexts (e.g., Lance, 1988), and (b) extend the residual centering procedure to represent latent variable interactions. The proposed method for representing latent variable interactions has potential advantages over extant procedures. First, the latent variable interaction is derived from the observed covariation pattern among all possible indicators of the interaction. Second, no constraints on particular estimated parameters need to be placed. Third, no recalculations of parameters are required. Fourth, model estimates are stable and interpretable. In our view, the orthogonalizing approach is technically and conceptually straightforward, can be estimated using any structural equation modeling software package, and has direct practical interpretation of parameter estimates. Its behavior in terms of model fit and estimated standard errors is very reasonable, and it can be readily generalized to other types of latent variables where nonlinearity or collinearity are involved (e.g., powered variables).
Relationship marketing—establishing, developing, and maintaining successful relational exchanges—constitutes a major shift in marketing theory and practice. After conceptualizing relationship marketing and discussing its ten forms, the authors (1) theorize that successful relationship marketing requires relationship commitment and trust, (2) model relationship commitment and trust as key mediating variables, (3) test this key mediating variable model using data from automobile tire retailers, and (4) compare their model with a rival that does not allow relationship commitment and trust to function as mediating variables. Given the favorable test results for the key mediating variable model, suggestions for further explicating and testing it are offered.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
This paper examines how trust and trustworthiness respond to lowering the principal’s risk in cultural settings focused on risk mitigation vs. risk prevention. We employ a binary-choice trust game and show that principals are confronted with a complex optimization problem: risk mitigation lowers the principal’s cost of betrayal but if agents are inequality averse or reciprocally minded, it can also increase its likelihood. This may be exacerbated in cultures not used to fostering trust by risk mitigation. Our experiments suggest that lowering risk only increases trust in the United States but not in Jordan. In both countries, trustworthiness decreases as the principal’s vulnerability decreases. We extend our findings to naturally occurring vulnerabilities in addition to the financial ones created in the laboratory.
We investigate which socioeconomic groups are most likely to change their risk preferences over the lifecourse using data from a nationally representative German survey and methods to separate age from cohort and period effects. Tolerance to risk drops by 0.5 SD across all socioeconomic groups from late adolescence up to age 45. From age 45 socioeconomic gradients emerge - risk tolerance continues to drop for the most disadvantaged and stabilizes for all other groups - and reach a maximum of 0.5 SD by age 65. These results matter because increased levels of risk aversion are associated with imprudent financial decisions in the event of crises.
Although many consumers turn to financial counseling to improve their financial well-being, the effectiveness of these counseling services remains nebulous and the exact mechanisms through which they improve consumer well-being require further research. This longitudinal research demonstrates that consumers’ coproduction of financial counseling services is pivotal for increasing their credit scores and for decreasing their financial stress. Drawing on self-determination theory, this study also shows that financial literacy, consumer involvement, and attachment styles are important drivers of coproduction. Involvement plays a moderating role, such that higher involvement substitutes for lower levels of financial literacy and mitigates the negative effects of attachment avoidance on coproduction. These findings help both counseling agencies and public policy makers improve the effectiveness of financial counseling. Financial counselors should track their customers’ objective and subjective financial literacy, involvement, and attachment styles, then segment customers, and, finally, tailor the service provision accordingly, to leverage coproduction as the pathway to consumers’ financial well-being. From a public policy perspective, the findings suggest that efforts to improve consumer financial literacy are important but should be supplemented with programs designed to increase consumer involvement in financial counseling; this combination promises to foster coproduction and improve consumers’ financial well-being.
In this article we discuss trust in ethics and management as a qualified and conditional good, arguing that researchers should focus on optimal trust - a mixture of trust and distrust appropriate in most contexts, including business. Trust is an important part of strategic choice, and managers who develop optimal trust in relationships with stakeholders will improve firm performance. We offer a definition of optimal trust, develop propositions based on the definition, and include indicators managers might use to assess whether trust is optimal in relationships with various stakeholders.
Four-hundred three randomly selected college students were interviewed using a modified version of the Core Survey (Presley, Meilman, & Lyerla, 1994) to assess alcohol consumption and its related problems. Path analysis supported the viability of two models. When controlling for individual characteristics, perceptions of peer drinking predicted alcohol use, which predicted alcohol problems.
The significance of decision theory consists of giving an account of rational decision making under circumstances of uncertainty. This question is important both from the point of view of what is in our personal interest and from the point of view of what is ethically right. But decision theory is often poorly understood and its significance only sparsely discussed in the literature. In a short history of decision theory, it is demonstrated how modern axiomatic decision theory works differently from classical decision theory, but also how it is confused with it. Further, it is explained how modern axiomatic decision theory is an instance of fundamental measurement theory. This is then followed by a thorough introduction to Savage’s version of modern axiomatic decision theory. Turning to the interpretation of the theory, the maxim “maximize expected utility,” which stems from classical decision theory, is shown to misrepresent the structure of modern axiomatic decision theory. Whereas the classical theory assumes a value assignment to outcomes and derives preferences over uncertain acts, the modern axiomatic approach assumes preferences over uncertain acts and derives the utility assignments. In the modern approach, the action guidance is to conform to the axioms. Analyzing decision theory as a theory of good, the maxim “maximize expected goodness” repeats the misunderstanding. Moreover, it implies risk neutrality about good and a cardinal measure of good, and both are problematic. Only an ordering of uncertain acts that conforms to the axioms allows for risk aversion about good. If there were an independent cardinal measure of the goodness of outcomes, utility would be an increasing, strictly concave transform of good. The Principle of Personal Good states the idea that the ordering of uncertain acts according to general betterness should be determined by how good the uncertain acts are for individuals. It sounds like a reasonable idea, and a widely used way of valuing life is based on it. But it is certainly not uncontroversial because it conceals conflicts of interest between individuals in final outcomes. In the context of decision theory for general and individual betterness, the Principle of Personal Good holds if, and only if, general utility is the sum of individual utilities. The chapter concludes with suggestions for future research.
Philosophical conceptions of the relationship between risk and trust may be divided into three main families. The first conception, taking its cue from Hobbes, sees trust as a kind of risk assessment involving the expected behavior of another person, for the sake of achieving the likely benefits of cooperation. The second conception of trust sees it as an alternative to calculative risk assessment, in which instead of calculating the risks of relying on another person, one willingly relies on them for other reasons, e.g., habitual, social, or moral reasons. The third conception sees trust as a morally loaded attitude, in which one has a moral expectation that one takes it to be the responsibility of the trusted person to fulfill. In the context of interpersonal relationships this attributed moral responsibility creates spheres perceived to be free of interpersonal risk, in which one can pursue cooperative aims. In this chapter, we examine how these three views account for two prima facie relationships between risk and trust, and we look at some empirical research on risk and trust that employs these different conceptions of what trust is. We then suggest some future areas of philosophical research on the relationship between trust and risk.
This study focuses on the mechanisms by which professional service providers effectively influence customers to adhere to their expert guidance and advice. Eliciting customer adherence is a critical concern for professional service firms since customers of these need-based (rather than want-based) services are often reluctant to adhere, and nonadherence can result in serious negative consequences to customer well-being and firm resource utilization. The study examines this scenario by developing a conceptual framework that integrates the following three theoretical areas: professional services theory, advice utilization theory, and social cognitive theory. The framework proposes associations between professional service provider actions and customer reactions, including adherence to expert advice, adherence intentions, and organizational resources needed to serve the customer (time cost and monetary cost). The study empirically tests the hypothesized relationships based on professional service provider-customer (physician-patient) interactions in a large health care organization setting using both primary survey data and objective, longitudinal customer data encompassing a 48-month period. Results indicate that advice giving frequency and focus on negative consequences impact customer outcomes and the effects are moderated by perceived customer efficacy and service provider efficacy. The findings shed light on the underlying dynamics of customer adherence to advice in professional service settings and provide guidance as to how that adherence can be effectively elicited.
The authors report the results of two studies that attempt to model antecedents of organizational citizenship behaviors in a personal selling context. They draw the antecedents from extant research and propose that the willingness to perform organizational citizenship behaviors is related to the job-related perceptions of the degree of organizational fit between the salesperson and his or her firm, level of leadership support, perceived fairness in reward allocation (i. e., distributive justice), and job satisfaction. They hypothesize and test direct and indirect relations with these constructs and organizational citizenship behaviors. Most of these relations were significant across the two studies.
Marketing research often finds weak correspondence between purchase intentions and subsequent behaviors. The author claims lack of contextually specific measures is partially responsible. Existent research supports this contention. The study reported empirically compares direct and conditional intentions as predictors of soft drink purchases. The conditional format is more predictive.
This study examines the role of trust in customer–seller relationships before and after the 2008 financial crisis. On the basis of two surveys comprising 1155 and 757 bank customers, respectively, it is shown that trust is less likely to mediate the relationship between satisfaction and loyalty after the financial crisis compared with before the financial crisis. The results suggest that consumers rely more on satisfaction and less on trust after the financial crisis compared with before the financial crisis when determining whether they should remain loyal to a particular financial service provider. Hence, as a direct managerial implication, financial service managers should consider investing additional resources in satisfying their customers in the after crisis era. In addition, it is suggested that managers should seek to rebuild the positive relationship between trust and loyalty in order to receive the full benefit of their trust-building efforts. Copyright © 2014 John Wiley & Sons, Ltd.
Applying the elaboration likelihood model to the initial website trust formation context, this study investigated the cognitive process in which consumers evaluate an unfamiliar website and form website trust. Specifically, it examined consumers' cognitive process of various website design and content factors in the formation of website trust, and the influence of two specific consumer characteristics – situational involvement and e-commerce knowledge – on the cognitive processing. Results from an experiment revealed that the level of e-commerce knowledge was significantly related to the extent of cognitive processing during website trust formation. Also, consumers with a low level of situational involvement and e-commerce knowledge tended to place more focus on website design factors, which are peripheral cues, than did those with a high level of involvement and knowledge. In addition, this study found that consumers with higher levels of involvement were more likely to seek and actively process trust-inducing arguments.
Prior research suggests that knowledge calibration (KC) supports consumers’ maintenance of a healthy diet. However, no previous studies have considered that learned helpless consumers may refrain from using their knowledge, even though they may be fully aware that they possess it. This research gap is considered in three studies. Study 1 investigates the moderating effect of learned helplessness (LH) by means of a cross‐sectional survey. Studies 2 and 3 are online choice studies. Besides from replicating Study 1, Studies 2 and 3 eliminate potential social desirability bias by objectively measuring respondents’ dietary choice quality. In addition, Study 3 takes into account the possibility that respondents’ responses may be biased by food preferences, medical conditions, and/or food allergies. Moreover, Studies 2 and 3 both investigate the consequences of the findings on consumers who live under a dieting regime. These studies demonstrate that consumers suffering from LH do not stand to gain from calibrating their dietary knowledge to the same degree as other consumers. It is also shown that dieting behavior has a tendency to weaken this negative moderating effect of LH on the relationship between KC and dietary choice quality. Finally, the implications of the findings for marketers and public policymakers are discussed.
Purpose
– The purpose of this paper is to examine the involvement levels and the information search activity of consumers purchasing credence services, in terms of the extent of the search and the information sources used.
Design/methodology/approach
– A survey was undertaken ( n =400) examining consumers ' information search practices for a range of credence services in comparison to non-credence services (search and experience services).
Findings
– Involvement in the search process is high in terms of importance but not interest. Somewhat surprisingly, consumers of credence services do not undertake a more comprehensive information search than non-credence service purchasers in terms of the use of external sources of information. They do, however, depend more on the opinion of salespeople, the experience of friends and the content of consumer reports.
Research limitations/implications
– The results of this study differ from similar work that was previously undertaken with students and also in the USA. It would be useful to establish more strongly whether age and culture have an impact on information search.
Originality/value
– This is the first time that the information search patterns of consumers of credence services have been undertaken for a wide range of common purchases in the UK. It is also original in this area of research in that it utilises a cross section of the population and not students. Its findings are important to the providers of credence services when considering their marketing communications campaigns because it reveals which marketing communication tools are considered by the consumer to be influential.
Although the financial crisis has elevated the interest for factors such as consumer financial healthiness, broad-scope trust, financial knowledge, and consumer relationship satisfaction, no existing model describes how these factors may influence consumer financial relationship trust. This research extends prior research by developing a conceptual framework explaining how these constructs affect consumers' trust in their financial service provider. Based on two surveys comprising 764 pension consumers and 892 mortgage consumers, respectively, the results of this study indicate that financial healthiness, broad-scope trust, knowledge, and satisfaction positively affect narrow-scope trust in financial services. Furthermore, it is found that broad-scope trust negatively moderates the relationships between financial healthiness and narrow-scope trust and between satisfaction and narrow-scope trust, respectively. In addition, the results marginally indicate that broad-scope trust negatively moderates the relationship between consumer financial knowledge and narrow-scope trust. This study encourages public policy makers, consumer organizations, and financial service providers to continue, improve, and/or develop consumer financial education programs and also encourages consumers to participate in such programs. This is especially important when broad-scope trust is low. Also, when broad-scope trust is low, financial service providers should consider devoting additional resources in satisfying their customers and/or in improving their financial healthiness.
The relationship between unethical peer behavior and observers’ unethical behavior traditionally has been examined from a social learning perspective. We employ two additional theoretical lenses, social identity theory and social comparison theory, each of which offers additional insight into this relationship. Data from 600 undergraduate business students in two universities provide support for all the three perspectives, suggesting that unethical behavior is influenced by social learning, social identity, and social comparison processes. Implications for managers and future research are discussed.
The relationship of the importance and hedonic dimensions of product involvement to information search is analyzed. Four different models of the role of perceived risk in this relationship are compared and tested. It is expected that perceived risk will mediate the effect of the dimensions of product involvement on information search. Previous investigations have used individual consumers as the units of observation and have, therefore, limited the generalizability of their results to a few products at best. In contrast, the study reported in this paper attempts to determine the relationships of interest with products as the units of observation. It is found that perceived risk fully mediates the effect of the importance dimension of product involvement on information search but not of the hedonic dimension. The effect of hedonic involvement on information search is direct.
This is an overview of philosophical issues in risk research, including the definition of risk, the relationship between risk and uncertainty, the effects of cognitive limitations on rationality constraints, the implications of unknown possibilities, and the difficulties encountered when current decision theory and moral theory are applied to problems of risk. It is concluded that some of the models and assumptions commonly used in risk studies are deeply problematic.
A major problem encountered in covariance structure analyses involves decisions concerning whether or not a given theoretical model adequately represents the data used for its assessment. Given that X2 goodness-of-fit tests are joint functions of the difference between theoretical and empirical covariance structures and sample size, gauging the impact of sample size on such tests is essential. In this paper, we propose a simple index (critical N) and tentative acceptance criterion, which, by focusing on sample size, provide an improved method for assessing goodness-of-fit. Both small- and large-sample examples are presented, illustrating the utility of the proposed method for assessing theoretical models.
Presents results of a recent small-scale survey, carried out among young people in the UK, to examine the proposition that consumers tend to reduce spending on clothing before cutting back on other items, in times of economic recession, and also to examine those consumers' attitudes to debt and borrowing.
Promoting the ability to reason generatively about novel phenomena and problems students may encounter in their everyday lives is a major goal of science education. This goal proves to be a formidable challenge in domains, such as molecular genetics, for which the accumulated scientific understandings are daunting in both amount and complexity. To develop effective instruction that fosters generative reasoning we need to have a sound understanding of the types of knowledge in the domain that are critical for such reasoning. In this study I examined the ensemble of knowledge, both general and domain-specific, undergraduate students employed in reasoning about problems in genetics. I found that students initially formulate a solution in terms that are not domain specific and that serve as a frame–solution frame–that outlines and constrains a more specific and domain-appropriate explanation. This solution frame is then filled in with two powerful forms of domain-specific knowledge I term: domain-specific heuristics and domain-specific explanatory schemas. These knowledge forms embody understandings of central mechanisms and entities in molecular genetics. By invoking these domain-specific knowledge forms, students were able to reason about a variety of both familiar and novel genetics problems. I present a cognitive model that highlights the role of these powerful conceptual understandings in promoting generative reasoning in genetics.
In this article, the author studies the processes by which consumers' quality perceptions of a brand in a product category are affected by their experience with the same brand in a different category. The model proposed and estimated explicitly incorporates some of the basic consumer behavior premises of signaling theory of umbrella branding (Montgomery and Wernerfelt 1992; Wernerfelt 1988). The author provides a framework to analyze the impact of marketing mix strategies in one product category on quality perceptions, consumer perceived risk, and consumer choice behavior in a different category. The model is estimated on panel data for two oral hygiene products, toothpaste and toothbrushes, in which a subset of brands share the same brand name across the two product categories. The results show strong support for the consumer premises of the signaling theory of umbrella branding.
Selling alliances that are formed to cooperatively develop and maintain customer relationships are among the new organizational forms that marketing managers utilize for competitive advantage. To be successful, these alliances require sales representatives from allied organizations to work effectively as selling partners. The authors develop a trust-based model of effective selling partner relationships and test it in the context of the computer industry. Par- tial Least Squares analysis of 103 dyadic relationships found that organizational differences were modest predic- tors of three dimensions of mutual perceived trustworthiness, which in turn differentially affected three trusting behaviors. Trusting behaviors were found to have a somewhat greater effect on perceived task performance than on mutual satisfaction, whereas dimensions of trustworthiness had both direct and indirect effects on satisfaction. The authors discuss the managerial and theoretical implications of these results.