Negativity bias in consumer price response to ethical information

The increasing debate on corporate ethics raises the question of whether consumers are willing to reward and punish corporate behaviour based on its ethicality. In this context, this article investigates the direct effect on consumers' willingness to pay. Price response to product‐related ethical information is explored in an experiment dealing with social issues in sportswear and environmental issues in consumer electronics. It is shown that in both areas, consumers demonstrate an increased willingness to pay for ethically produced goods. However, the response is subject to a negativity bias. In contrast to prior research that used abstract stimulus measures, a ratio for quantifying this bias is suggested based on consumers' willingness to pay and their price expectations. This measure allows us to analyse a consumer's individual bias.     

Because it is brand new! Recency heuristic for product innovativeness evaluation

This research identifies recency heuristic utilized by consumers with limited prior knowledge for product innovativeness evaluation. Consumers with limited prior knowledge of a product category perceived a new product as more innovative when its release date was more recent, while consumers with prior knowledge remained uninfluenced by recency information (Study 1). The effect was replicated at the product level (Study 2). It further demonstrates two critical boundary conditions—when recency was either irrelevant information or a rationally legitimate evaluative tool, recency heuristic was inapplicable (Study 3). The present research draws attention to the role of recency in conceptualizing product innovativeness and further elaborates the understanding of how the construct of innovativeness is represented in consumers' minds by focusing on the conceptual relationship of novelty and recency. It also contributes to the heuristic literature by proposing recency as an evaluative heuristic tool for innovativeness assessment. Results provide managers with practical insight into whether to highlight or downplay product release date information depending on their target audience and the level of product innovativeness.     

Managerial Incentives and Investment Policy in Family Firms: Evidence from a Structural Analysis

This paper provides evidence that CEO incentive pay mediates the effect of family preferences on corporate investment policy. Our study focuses on the option portfolio volatility sensitivity vega, which motivates the risk‐taking behavior of undiversified managers. After controlling for factors that affect incentive pay and investment policy simultaneously, we find that one‐third of underinvestment in riskier R&D projects in active family firms can be attributed to a significantly lower vega. Passive family firms allocate more capital to R&D as opposed to active family firms, and are more active in M&A deal making. In contrast to many prior studies, pay incentives and families are not associated with capital expenditures. Overall, our empirical results suggest that CEO pay incentives induce investment policy contingent on firm risk. Family CEO incentive pay manifests the family preference for lower risk, especially in firms with higher firm risk. Nonetheless, after replacing family CEOs with outside professionals, investments in both R&D and M&A increase, which is consistent with the family preference for extended investment horizons. Interestingly, such a preference seems not to be manifested in incentive pay.     

The effect of involvement on visual attention and product choice

Our study examined the effect of consumers' level of involvement on visual attention to product, information sign and price sign guided by the Elaboration Likelihood Model (ELM). We also investigated the relationship between visual attention captured by eye fixation on information and price sign and product choice for garden plants. Using a Tobii X1 light eye tracking device, we obtained data from 101 respondents in Texas and Michigan. We found that participants who had high (vs. low) product involvement paid more attention to the product and its information as demonstrated through higher fixation count (FC), longer total fixation duration (TFD), and total visit duration (TVD). We also found highly involved participants processed price information as a central rather than a peripheral cue. In addition, total visit duration (TVD) on an information sign was found as the strongest predictor of product choice.     

Auditors' ability to discern the presence of ethical problems

Recently, society and the accounting profession have become increasingly concerned with ethics. Accounting researchers have responded by attempting to investigate and analyze the ethical behavior of accountants. While the current state of ethical behavior among practitioners is important, the ability of accountants to detect ethical problems that may not be obvious should also be studied and understood. This study addresses three questions: (1) are auditors alert to ethical issues; (2) if so, how important do they perceive them to be; and (3) what factors affect their sensitivity threshold and their perceptions of the importance of the issues? Most of the prior research in accounting ethics presents subjects with scenarios that contain an obvious ethical issue, and subjects realize that they are participating in an ethics study. In the present study, the ethical problems are integrated into general accounting situations in order to discover the sensitivity of accounting professionals to them. This study defines ethical sensitivity as the ability to interpret a given situation and to realize that a moral problem exists. CPAs responded to an experimental instrument comprised of three auditing scenarios taken from the 1989 Trueblood cases, adapted to deal with different ethical problems — tax evasion by a client, auditor independence, and a client's ethical problem which does not directly affect the audit. The accounting and/or auditing problems presented in the three cases were also different with the information relating to the possible ethical problem embedded in the situation. Multiway contingency tables were used to analyze the data. Factors useful in predicting whether a subject will mention an ethical issue include the nature of the ethical issue, the issue's severity, and the subject's age. Employment position, expertise (measured by two proxies), prior exposure to a similar ethical issue and education level (undergraduate versus graduate) were not significant. The ethical issue itself was also a significant factor in determining the absolute importance given to the ethical issue.     

Understanding consumer decision making in grocery markets: does attitude-behaviour consistency vary with involvement?

The paper reports on an empirical study of purchase decision making in grocery markets. Against the central research question, 'Does decision making become more extensive with more involved product purchases?', measurements of attitude- behaviour consistency were made in three product fields which are known to engender significantly different levels of consumer involvement. The extended Fishbein model was used as the metaphor for purchase decision making and models were estimated for each product field using LISREL VII to determine the fit between product and normative beliefs, behavioural intention and actual purchasing behaviours. The results of our analysis are consistent with prior theory and support the hypothesis that the efficacy of the model in grocery markets increases as the purchase involvement increases. The implications for marketing communications within each market are discussed and the limitations of our research design are highlighted.     

Toward an Integrated Model of Purchase Intention of Dietary Supplements in Sexually Oriented Advertising

This study was designed to examine antecedent factors that yielded a model of purchase intention of dietary supplements in sexually oriented advertising. Results suggested that sexual cognition, gender difference, individual attitude toward advertisements, and product involvement were yielded as key predictors toward people's purchase intention of dietary supplements. However, sexually oriented advertising did not considerably increase their purchase intention. A regression analysis also loaded sexual cognition and product involvement as two key determinants in the model of purchase intention of dietary supplements. Moreover, people with a more positive level of sexual cognition significantly resulted in their higher degree of purchase intention of dietary supplements.     

Exploring entrepreneurial learning: a comparative study of technology development projects

In this paper, we report findings from a comparative study of factors that influence the learning process that underlies entrepreneurial innovation, as entrepreneurs move from an initial intuition to a well-developed new product or service. Evidence from our comparative study highlights the self-reinforcing effect of prior related knowledge, perceived incentives and the degree of control on the allocation of entrepreneurs' limited time, attention and resources. Combining theory and evidence from our study, we propose an interpretative model that suggests that innovation in entrepreneurial ventures rests on self-reinforcing learning cycles that lead entrepreneurs to dedicate increasing resources to the exploration of some opportunities at the expense of others, following a sensemaking process affected by their previous knowledge and their degree of involvement in the projects.     

Using Internet Behavior to Deliver Relevant Television Commercials

Consumer footprints left on the Internet help advertisers show consumers relevant Web ads, which increase awareness and click-throughs. This “proof of concept” experiment illustrates how Internet behavior can identify relevant television commercials that increase ad-effectiveness by raising attention and ad exposure. Product involvement and prior brand exposure, however, complicate effective Internet-targeting. Ad relevance matters more for low-involvement products, which have a short pre-purchase search process. For the same reason, using Web browsing behavior to make inferences about current ad relevance is more accurate for low-involvement products. Prior brand exposure reduces information-value, even for relevant commercials, and therefore dampens ad relevance's effect on attention and ad exposure.     

Children and advergames: the role of product involvement,prior brand attitude,persuasion knowledge and game attitude in purchase intentions and changing attitudes

The central aim of this study is to build upon previous research by investigating the role of product involvement, prior brand attitude, persuasion knowledge and game attitude in the brand attitude changes and purchase intentions of children after playing an advergame. In all, 279 respondents between the ages of 10 and 12 years participated in the study. First, they were asked to complete a pre-test survey addressing product involvement and prior brand attitude towards several products and brands. Two weeks later, the respondents were asked to play an advergame and complete a survey addressing brand attitude, purchase intention, persuasion knowledge and attitude towards the game. Our analysis reveals that a positive attitude change is more likely when the game player has already evaluated the brand positively. Furthermore, game attitude is positively related to attitude changes towards the advertised brands, consistent with affect transfer theory. Counterintuitively, a higher level of persuasion knowledge is associated with a higher intention to buy the advertised product. Finally, children who had a more positive attitude towards the game were more likely to report higher purchase intentions, indicating that games which provide good experiences positively influence behavioural intentions. We conclude the paper by discussing the study's limitations and suggestions for future research.     

Quest for the eco‐apparel market: a study of mothers' willingness to purchase organic cotton clothing for their children

The purpose of this study was to examine what consumer characteristics are related to willingness to purchase and selection of children's organic cotton clothing (OCC). A survey was conducted on mothers of pre‐schoolers to collect data on mothers' environmental characteristics, involvement with OCC and children's clothing, children's clothing purchasing behaviour and willingness to purchase OCC. A buying scenario experiment was used to examine whether price and other product characteristics influenced the participants' selection of OCC. It was found that a mother's environmental concerns, environmental purchasing behaviour and recycling behaviour significantly affected their involvement in OCC, which further significantly determined mother's willingness to purchase OCC. However, mothers were not willing to pay a premium for purchasing children's OCC. A majority (59.5%) of the mothers who selected OCC in the buying scenario indicated fabric softness was the main reason for their selection. Preparing environmental education materials for consumers and producing OCC with high quality and good performance would help improve the acceptance of OCC in the market.     

Consumer response to product construction: the role of haptic stimulation

This study investigates how consumers are affected by haptic information, that is, the information acquired through the sense of touch, when they take part in the construction or assembly of a product. In order to create value for consumers, marketers must understand how and why haptic information affects the evaluative processes of consumers and whether there are specific segments that are affected differentially by the process. An experimental design with two between‐subjects factors was used to examine consumers' responses to haptic stimulation during the physical construction of a picture frame. The results demonstrate that positive haptic stimulation evoked by the materials used in the product's construction results in an affective response and creates emotional attachment to the finished product. However, the effect is not generalizable to the general population. It depends on the level of autotelic (not functional) need for touch (NFT) that the consumer has. Consumers who have high autotelic NFT are more likely to become attached to and, consequently, enhance their evaluation of the finished product when the product materials used during the construction evoke a positive haptic stimulation.     

Founding Family Firms,CEO Incentive Pay,and Dual Agency Problems

This paper contributes to the literature on agency theory by examining relations between family involvement and CEO compensation. Using a panel of 362 small U.S. listed firms, we analyze how founding families influence firm performance through option portfolio price sensitivity. Consistent with the dual agency framework, we find that family firms have lower CEO incentive pay, which is further reduced by higher executive ownership. Interestingly, such incentive pay offsets the positive impact that families have on firm valuation. Collectively, our results show that, compared with nonfamily firms, lower incentive pay adopted by family firms due to lower agency costs mitigates the direct effect of family involvement on firm performance. Once accounting for CEO incentive pay, we do not observe performance differences between family and nonfamily firms.     

The Effect of Organic Food Labels on Consumer Attention

This paper aims to reveal consumer perceptions of organic food with a special emphasis on the labelling of organic products. The objectives were to find out, whether or not a significant difference between men´s and women´s perception existed. Two groups (88 subjects in the experimental group, 59 subjects in the control group) were shown various food labels; with organic product labelling (experimental) and without (control). Results suggest the importance of organic labelling using eye-tracking data and additional in-depth interviews to discover the importance of the labelling for participants. Based on eye-tracking data, the greatest visual attention was paid to product brand, graphic elements and organic labelling claims with additional information, such as a quantity or flavour, also being important. Additional in-depth interviews discovered that labelling, particularly of the origin, is important for most consumers. Contrary to what was expected, eye-tracking showed very little difference in the perception of organic product labelling based on gender. Although organic food is being purchased by more people, 50% of participants mentioned, during interviews, that they buy organic food only occasionally. The combination of eye-tracking and in-depth interviews shows that organic product labelling can play a role in decision-making, but regardless 27% of participants do not care about the organic quality labels or don’t pay attention to them.     

Culture-Based Values and Management Style of Marketing Decision Makers in Six Western Pacific Rim Countries

ABSTRACT

Given increasing advertisement clutter, advertisers are increasingly trying unconventional means to attract consumers' attention. One such method involves the use of incongruent ads, which are believed to attract viewers' attention. This research was conducted to ascertain the impact of audiovisual congruency in ads and the moderating role of product involvement on three facets of consumer response: attention to the ad, attention to the brand, and purchase intentions. Participants were shown one of eight TV ads for 30 seconds, following which they were asked to rate the ad on several dimensions. Results indicated, as expected, that congruent product and music type elicited favorable consumer responses. However, contrary to earlier findings that congruency in ads affects consumers in both high- and low-involvement conditions, we find that that the level of involvement moderated this effect on some consumer persuasion measures. In particular, participants under high-involvement conditions were found to be less influenced by congruent product–music situations. Implications for advertisers are discussed.     

The Public Health Implications of Consumers' Environmental Concern and Their Willingness to Pay for an Eco‐Friendly Product

Environmental concern has been an important topic for more than 40 years and has recently become even more critical with today's concerns about creating a sustainable and healthy environment. This research examines factors affecting an individual's willingness to pay more for an environmentally friendly product. Our results show that willingness to pay more differs across demographic groups. We also find that individuals who rate concern for waste as highly important are willing to spend more money on an eco‐friendly product. Consequently, our findings provide insight into the development of appropriate educational strategies for different consumer groups to encourage consumers to purchase eco‐friendly products, with a goal of creating a healthier environment for current and future generations.     

An investigation into the link between consumer's product involvement and store loyalty: The roles of shopping value goals and information search as the mediating factors

This research proposes a theoretical model explaining the roles of multiple mediating factors – product quality, service quality, and information search –in the association between product involvement and store loyalty. The extant literature has examined different determinants of store loyalty but paid less attention to understand the link between product involvement and store loyalty and the underlying mechanisms. This study contributes to the literature by a) providing a comprehensive framework of involvement – loyalty link and b) investigating complex mediation effects. In this study, survey data were subjected to regression analysis to test parallel mediation and serial mediation effects of product quality, service quality, and information search in the link between consumer's product involvement and store loyalty. The results indicate that both product quality and information search mediate the association between product involvement and store loyalty. In addition, both product quality and service quality mediate the association between product involvement and information search. Results also indicate that product quality and information search work as serial mediators in the association between product involvement and store loyalty. For additional level of analyses, data were also subjected to Importance-Performance Map Analysis (IPMA). Theoretical and managerial implications are also provided.     

Communicating food quality to consumers

This study examines the role of cues on food packaging in consumers' prediction of product quality. Ten empty pork sausage packs (ingredients panel removed) and 10 corresponding ingredients lists were ranked in order of expected eating quality of the sausages. Five pork sausages were evaluated and rated for liking. Subjects, who up to this point had been unaware that packs, ingredients lists and the sausages themselves were related, then discussed their responses. Frozen sausages were expected to be of poorer quality than fresh ones. Packaging had a major effect on subjects' expectations of product quality. Brand name was the strongest factor in determining expectations of the quality of a product. Subjects were sensitive to issues related to food safety, such as likely pack integrity, presence of beef in pork sausage and presence of additives. Graphics and colour schemes also played an important role: perceived careless design of packaging suggested a similarly carelessly designed product. Health claims and quality marks and claims influenced expectations and were generally taken on trust. Study of the ingredients panels raised suspicions about quality where ingredients lists were ‘too long' and where there were items that subjects either did not know or did not think appropriate. The product for which the highest level of sensory enjoyment had been predicted, and which had a considerably higher meat content than any of the other sausages, did not fulfil subjects' expectations of eating quality. It failed on appearance, flavour and texture.     

非对称信息下实物期权投资经理人的最优薪酬激励机制

在经理人努力水平和项目经营成本两种信息不对称的情况下．研究实物期权投资经理人的最优激励机制,综合应用实物期权理论和委托代理理论,在非对称信息为连续分布（区间上的均匀分布）的情况下建立了最优激励机制模型,并具体分析求解最优分成制合约,分析信息不对称对企业拥有者制定经理人最优激励合同的影响。     

Connected consumers' responses to negative brand actions: The roles of transgression self-relevance and domain

Brand misdeeds abound in the marketplace, but prior research indicates that having a strong connection with a brand buffers consumers from adverse effects of brand transgressions. However, the present research questions the scope of this buffering effect. The studies in this research demonstrate that strongly connected consumers are not so forgiving of a brand transgression if the brand's actions are personally relevant to them or if the negative actions are of an ethical nature rather than related to product performance. In particular, this research finds that the well-documented buffering effect emerges only when negative brand actions are not self-relevant for the individual consumer and the negative actions lie in the product, not ethical, domain. Therefore, contrary to the findings of prior research, connected consumers' brand attitudes are far from immune to brand misdeeds. Implications for managing brand crises conclude the article.