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1 – 10 of over 6000Ziqi Shang, Jun Pang and Xiaomei Liu
The purpose of this research is to examine the effect of temporal landmarks on positive illusions and the downstream implications of this effect on consumer preference for new…
Abstract
Purpose
The purpose of this research is to examine the effect of temporal landmarks on positive illusions and the downstream implications of this effect on consumer preference for new products with functional risks.
Design/methodology/approach
Study 1 adopted a single factor (temporal landmarks: beginning vs ending) between-subjects design. Study 2 adopted a 2 (temporal landmarks: beginning vs. ending) × 2 (salience of the temporal landmark: salient vs not salient) between-subjects design. Study 3 used a single factor (temporal landmarks: beginning vs ending) between-subjects design.
Findings
Through three studies, we show that the ending temporal landmarks reduce positive illusions (Studies 1 and 2). The underlying process is enhanced perceptions of psychological resource depletion (Study 3). The authors further show that decreased positive illusions lead consumers to less prefer new products with functional risks (Study 3).
Originality/value
Existing studies on temporal landmarks have exclusively focused on the beginning landmarks and account for its effects from a motive perspective. In contrast, the authors take a look at the ending landmarks and identify perceptions of psychological resource depletion as the underlying process, which suggests a new angel understand how temporal landmarks influence individuals' cognitions and behavior.
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Yafeng Fan, Jing Jiang and Zuohao Hu
In daily life, consumers usually experience economic limitations on their consumption, which in turn results in experiencing financial constraints. The purpose of this article is…
Abstract
Purpose
In daily life, consumers usually experience economic limitations on their consumption, which in turn results in experiencing financial constraints. The purpose of this article is to examine how feeling financially constrained influences variety seeking in consumption.
Design/methodology/approach
The authors conducted three experiments to test the proposed hypotheses by applying multiple methods of manipulation of financial constraints and different measures of variety seeking.
Findings
The authors found that feeling financially constrained increases consumers’ insecurity, which in turn decreases their variety-seeking behavior. Additionally, the authors noted that individuals’ positive illusion could moderate the aforementioned effect. The negative effect of financial constraints on variety seeking only existed among consumers with a low positive illusion.
Practical implications
The findings in this article could help marketers attain a better understanding of consumers’ choices under financial constraints and could help retailers optimize their product lines and distribution.
Originality/value
This research marks the first attempt to examine the relationship between financial constraint and variety seeking. The findings make for a valuable addition to both the financial constraint and variety-seeking literature reviews. The research study also extends the literature on how insecurity and positive illusion influence individuals’ decisions in the consumption context.
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Fanglan Pang, Ruifeng Wei and Guijun Zhuang
This paper aims to evaluate the effect of commitment misperception on channel conflict. It highlights the importance of trust and transaction-specific investments for business…
Abstract
Purpose
This paper aims to evaluate the effect of commitment misperception on channel conflict. It highlights the importance of trust and transaction-specific investments for business marketing strategies.
Design/methodology/approach
This paper develops a concept framework to understand how the direction (overestimated vs underestimated) and extent of commitment misperception influence channel conflict. The model is tested using dyadic data from 212 distributors and manufacturers across several industries in China.
Findings
The results show that the direction of commitment misperception affects trust, transaction-specific investments and channel conflict. Overestimated commitment induces positive illusion and enhances trust and transaction-specific investments and reduces channel conflict, whereas underestimated commitment induces negative illusion and reduces trust and transaction-specific investments and enhances channel conflict. Trust and transaction-specific investments mediate the impact of the direction of commitment misperception on channel conflict. The extent of commitment misperception plays the moderating influence on the direction of commitment misperception.
Originality/value
This study reveals the mechanisms and boundary conditions by exploring the mediating influence of trust and transaction-specific investments and the moderating effects of the extent of commitment misperception.
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Parvathy S. Nair and Atul Shiva
The study explored various dimensions of overconfidence bias (OB) among retail investors in Indian financial markets. Further, these dimensions were validated through formative…
Abstract
Purpose
The study explored various dimensions of overconfidence bias (OB) among retail investors in Indian financial markets. Further, these dimensions were validated through formative assessments for OB.
Design/methodology/approach
The study applied exploratory factor analysis (EFA) to 764 respondents to explore dimensions of OB. These were validated with formative assessments on 489 respondents by the partial least square path modeling (PLS-PM) approach in SmartPLS 4.0 software.
Findings
The major findings of EFA explored four dimensions for OB, i.e. accuracy, perceived control, positive illusions and past investment success. The formative assessments revealed that positive illusions followed by past investment success among retail investors played an instrumental role in orchestrating the OBs that affect investment decisions in financial markets.
Practical implications
The formative index of OB has several practical implications for registered financial and investment advisors, bank advisors, business media companies and portfolio managers, besides individual investors in the domain of behavioral finance.
Originality/value
This research provides a novel approach to provide a formative index of OB with four dimensions. This formative index can acts as an overview for upcoming researchers to investigate the OB of retail individual investors.
Highlights
Overconfidence bias is an important predictor of retail investors' behavior
Formative dimensions of the overconfidence bias index.
Accuracy, perceived control, positive illusions and past investment success are important dimensions of overconfidence bias.
Modern portfolio theory and illusion of control theory support this study.
Overconfidence bias is an important predictor of retail investors' behavior
Formative dimensions of the overconfidence bias index.
Accuracy, perceived control, positive illusions and past investment success are important dimensions of overconfidence bias.
Modern portfolio theory and illusion of control theory support this study.
Details
Keywords
Self-deception is generally deemed an adaptive psychological mechanism that ensures well-being, a sense of identity and social advancement. However, self-deception becomes…
Abstract
Purpose
Self-deception is generally deemed an adaptive psychological mechanism that ensures well-being, a sense of identity and social advancement. However, self-deception becomes maladaptive in organised environments that undermine the critical thinking essential to development and change. The purpose of this paper is to advance a theoretical model of self-deception, specifying and contextualising its intrapersonal and relational components in organisations. Further, it provides guidelines for practitioners to identify self-deception tactics, and minimise maladaptive self-deception.
Design/methodology/approach
Drawing on affective coping, system justification and self-categorisation theories, the paper illustrates how the interplay of intrapersonal and relational factors with organisational practices explain self-deception.
Findings
Maladaptive self-deception is pervasive in organisations that deter critical reflection, and intensify motivated biases to self-enhance and self-protect.
Originality/value
This paper proposes a socially and organisationally embedded model of self-deception, specifies how self-deception develops and manifests in organisations, and suggests ways of identifying and managing self-deception towards positive organisational development and change.
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Noppanon Homsud and Nopadol Rompho
This study aims to determine the effect of cognitive biases, that is, anchoring effect, illusion of control, and endowment effect, on customer satisfaction.
Abstract
Purpose
This study aims to determine the effect of cognitive biases, that is, anchoring effect, illusion of control, and endowment effect, on customer satisfaction.
Design/methodology/approach
An experimental design was applied using 524 undergraduate students as participants. A three-way ANOVA was employed for data analysis.
Findings
Positive relationships were found between cognitive biases and customer satisfaction. However, no such relationships were found between the interactions of various types of cognitive bias and customer satisfaction, except the interaction between illusion of control and endowment effect.
Research limitations/implications
This study focuses only on three types of cognitive biases; thus, it cannot be generalized to other such systematic patterns.
Practical implications
Marketers can introduce cognitive bias when implementing marketing campaigns to boost customer satisfaction.
Originality/value
This study expands the knowledge boundary by addressing the impact of the interaction between various aspects of cognitive bias that drive customer satisfaction.
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Guojin Gong, Yue Li and Ling Zhou
It has been widely documented that investors and analysts underreact to information in past earnings changes, a fundamental performance indicator. The purpose of this paper is to…
Abstract
Purpose
It has been widely documented that investors and analysts underreact to information in past earnings changes, a fundamental performance indicator. The purpose of this paper is to examine whether managers’ voluntary disclosure efficiently incorporates information in past earnings changes, whether analysts recognize and fully anticipate the potential inefficiency in management forecasts and whether managers’ potential forecasting inefficiency entirely results from intentional disclosure strategies or at least partly reflects managers’ unintentional information processing biases.
Design/methodology/approach
Archival data were used to empirically test the relation between management earnings forecast errors and past earnings changes.
Findings
Results show that managers underreact to past earnings changes when projecting future earnings and analysts recognize, but fail to fully anticipate, the predictable bias associated with past earnings changes in management forecasts. Moreover, analysts appear to underreact more to past earnings changes when management forecasts exhibit greater underestimation of earnings change persistence. Further analyses suggest that the underestimation of earnings change persistence is at least partly attributable to managers’ unintentional information processing bias.
Originality/value
This study contributes to the voluntary disclosure literature by demonstrating the limitation in the informational value of management forecasts. The findings indicate that the effectiveness of voluntary disclosure in mitigating market mispricing is inherently limited by the inefficiency in management forecasts. This study can help market participants to better use management forecasts to form more accurate earnings expectations. Moreover, our evidence suggests a managerial information processing bias with respect to past earnings changes, which may affect managers' operational, investment or financing decisions.
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Steven W. Kopp and Elyria Kemp
Research on death and dying in Western culture holds that individuals engage in a denial and repression of thoughts about death. However, this paper aims to propose that some…
Abstract
Purpose
Research on death and dying in Western culture holds that individuals engage in a denial and repression of thoughts about death. However, this paper aims to propose that some individuals actively make attempts to exercise control over their eventual demise by engaging in decision-making to achieve an “appropriate death.” A framework is introduced that provides the basis for exploring aspects of decision-making for end of life.
Design/methodology/approach
Depth interviews were conducted with 18 consumers about their dispositions toward death and their decision-making regarding their own funerals.
Findings
An analysis of the consumer narratives suggests that individuals make efforts to prepare for end of life by reducing conflict and finishing business, enlisting identity management strategies and coming to terms with death itself. Unique consumption experiences and decisions accompany each of these efforts.
Research limitations/implications
This research provides understanding regarding how individuals cope with death by attempting to enlist control over a situation in which they have very little control. In doing so, these individuals make efforts to achieve an “appropriate death” by making explicit decisions for end of life.
Originality/value
Instead of actively engaging in defense mechanisms to deny and repress thoughts of death, this research demonstrates that individuals may recognize the inevitability of death as fulfillment of life. In doing so, they may subscribe to positive illusions regarding end of life and make attempts to exercise control over the event.
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