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In modern societies, consumer well-being is dependent on choices regarding complex services, such as investments, health care, insurance and lending. However, evaluating costs of such services is often difficult for consumers due to a combination of limited cognitive resources and complexity of the service. The purpose of this study is to empirically examine to what extent three specific consequences of complexity influence consumer tendencies to make mistakes when evaluating the costs (or price) of complex services.

Three studies were conducted (survey: n = 153, experiment: n = 332 and conjoint analysis: n = 225), all focusing on how consumers evaluate costs in the complex mutual fund setting.

The authors find that consumers struggle with estimating and using cost information in decision-making in the complex services setting. Consumers of complex services frequently underestimate the costs over the long-term, may see costs as a signal of service quality and are susceptible to influence from presentation formats when evaluating costs.

The study investigates mutual funds, which is one example of a complex service. In order to get a full picture of how consumers deal with costs in complex setting, future research needs to expand this focus to other types of complex services.

The results have implications for both marketers of complex services and policymakers. For marketers, this paper highlights that competing with a low-cost strategy may be difficult in the complex services setting as consumers may lack the ability to actually evaluate what they pay over the long term. For policymakers, increased simplification of prices may be an attractive option. However, it is important that this simplification is done in a way that increases the possibility to compare prices.

As complexity influences several aspects of decision-making, an understanding of how consumers evaluate costs in complex settings is dependent on taking a multidimensional research approach. This paper makes a novel contribution to the literature on pricing by showing that consumers struggle with multiple aspects when evaluating costs in complex contexts. Understanding these effects is important to policy, as well as to research on the cognitive value of simplicity that is currently gaining traction in marketing research.

This paper aims to examine the impact of online reviews on behavioral intentions via perceived risk. Perceived risk is both analytical and emotional. Stimulus–organism–response (S–O–R) framework guided this study to explore the interaction between online reviews, perceived risk and behavioral intentions.

The conceptual model proposed in this research has been validated using confirmatory factor analysis (CFA) and structural equation modeling to assess the measurement model and the validity of the scale, based on primary responses collected from 473 travelers.

Findings of this study suggest the role of online consumer reviews in reducing the perceived risk associated with experience dominant services like tourism. Process model test proves the mediating role of perceived risk between online reviews and behavioral intentions. Results indicate the significance of online review in lowering the perceived risk leading to positive behavioral intentions.

Destination marketing organizations (DMOs) should understand the role of online reviews in effectively reducing risk and uncertainty, thereby influencing behavioral intentions.

This paper is unique in attempting to empirically examine the mediating role of perceived risk between online reviews and behavioral intentions. The study is a forerunner in using S–O–R framework to test the interaction between online review, perceived risk and behavioral intention.