How behavioral decision research can enhance consumer welfare: From freedom of choice to paternalistic intervention

Decision-making researchers have largely focused on showing errors and biases in consumers' decision-making processes without paying much attention to the social welfare and policy implications of these systematic behaviors. In this paper, we explore how findings and methods in behavioral decision research can be used to help consumers improve their decision making and enhance their well-being. We first review select findings in behavioral decision research to explain why consumers need help in decisions, and based on these findings, suggest various interventions that could be effective within the scope of libertarian paternalism. Ethics and effectiveness of the interventions are also discussed.     

The Korean Air nut rage scandal: Domestic versus international responses to a viral incident

This article investigates responses of the international and domestic (South Korean) publics to one of the most hotly debated corporate scandals in recent years: Korean Air’s so-called nut rage incident. By analyzing both international and domestic media coverage of the occurrence, we reveal contrasting interpretations between the two. Whereas the South Korean public tends to generate intense debates addressing a lack of ethics in Korean Air’s public communication following the incident, international public criticism is dominated by questions regarding South Korea’s chronic chaebol system and its negative image in relation to South Korea’s unique institutional context. Korean Air’s incongruent notice of the employee as a key stakeholder is also discussed in the international media. Our research findings indicate how, rather than focusing on legal responsibility, the normative attitude of businesses toward stakeholder pressures is crucial as a means of escaping legitimacy-threatening events. The results of this study demonstrate how public responses to a single incident are diverse in global society and offer new insights regarding the importance of ethics in management leadership and public communication after a crisis incident.     

Brand-embedded interaction: a dynamic and personalized interaction for co-creation

Recognizing the importance of timely access to market knowledge for successful new product development (NPD), extant research has theoretically argued and empirically shown the value of consumer co-creation during the NPD process. While most research views consumer-generated content as definite or fixed, this paper reveals how firms can enhance the value of consumer-generated ideas by facilitating the exchange of relevant information during co-creation. The authors introduce brand-embedded interaction as a process that enables consumers to generate new product ideas that not only reflect user needs but also align with the brand’s goals and capabilities. Results from two quasi-field experiments using Twitter show that a higher degree of dynamic interaction and personalization during co-creation enables consumers to generate more constructive new product ideas or ideas that are valuable to both consumers and firms. Results offer important implications for both theory and practice regarding co-creation and new product development.     

The Aggregate Behavior of Banks: A Proposal for Prudential Supervision

This study seeks to investigate a macroeconomic approach that could help bank regulators and supervisors perform their task of ensuring financial stability. To achieve this, an attempt is made to explain the behavior of banks by analyzing aggregate time series of credit lending and deposit-taking, which are the variables involved in financial intermediation. This article's main contribution is to present evidence of banks’ behavior in their role as financial intermediaries, in terms of the performance of the variables that represent their credit-granting or deposit-taking decisions. For this purpose the study used a vector autoregressive model to construct impulse response functions and the Granger test. The results demonstrate the existence of bilateral causality between credit lending and deposit--taking, suggesting that banks actively manage the financial intermediation process. In addition, the results show that shocks to deposits destabilize the credit lending process, and credit supply shocks, in turn, destabilize deposit-taking. The latter result is important for understanding how financial instability can arise, and is thus relevant for the bank regulator.     

Customer perception and response to ethical norms in legal services marketing

The study here examines the relationship between ethical marketing norms, relationship quality (RQ), and commitment in the context of legal services. Through a survey of customers of legal services providers in Malaysia, data were collected. Results from a standard analysis of data show that the four dimensions of ethical marketing norms contribute significantly and explain a significant amount of variance in RQ and commitment. The results further show that three dimensions of ethical norms namely price and distribution norm, information and contract norm, and general honesty and integrity norm are significantly associated with relationship quality and commitment. Product and promotion norm has no significant relationship with relationship quality and commitment. RQ plays a mediating role in the relationship between marketing norms and commitment. The study reveals that the same three dimensions of marketing norms predict both RQ and commitment, and are useful for effective legal services marketing. These findings lead to research, managerial, contextual and policy implications that conclude the paper.     

Is Your Banker Leaking Your Personal Information? The Roles of Ethics and Individual-Level Cultural Characteristics in Predicting Organizational Computer Abuse

Computer abuse (CA) by employees is a critical concern for managers. Misuse of an organization’s information assets leads to costly damage to an organization’s reputation, decreases in sales, and impositions of fines. We use this opportunity to introduce and expand the theoretic framework proffered by Thong and Yap (1998) to better understand the factors that lead individuals to commit CA in organizations. The study uses a survey of 449 respondents from the banking, financial, and insurance industries. Our results indicate that individuals who adhere to a formalist ethical perspective are significantly less likely to engage in CA activities than those following a utilitarian ethical framework. In addition, the results provide evidence that employees with individualistic natures are linked to increased CA incidents, whereas collectivist tendencies are associated with decreases in CA behaviors. Our results also show that collectivism acts as a strong moderator that further decreases the relationships between formalism and CA, and utilitarianism and CA. Finally, we offer detailed suggestions on how organizations and researchers can leverage our findings to decrease CA occurrences.     

Choosing options for products: the effects of mixed bundling on consumers’ inferences and choices

For product categories such as cars, computers, vacation packages, and new homes, consumers usually choose not only the product itself, but also various options for the product. Sellers decide how to present these options to consumers, and they often sell options both individually and in bundles (mixed bundling). In this research, we examine how mixed bundling affects consumers’ inferences about the options and choices among the options. We demonstrate that as long as the seller’s motives for bundling options are not perceived to be negative by consumers, options offered both individually and in bundles are perceived to be more important and are more likely to be chosen than options offered only individually.     

Exploring the role of goal theory in understanding training motivation

A model to test conceptions from goal theory within an existing framework of training motivation was developed and tested with employees participating in training in a non‐profit organization. It was hypothesized that goal orientation ('distal factors’) along with self‐efficacy, expectancy and valence (‘proximal factors’) would predict goal intentions as well as training outcomes such as affective responses to training, perceptions of training utility and intention to transfer or use the training provided. Results revealed that goal orientation predicted a significant proportion of variance in the proximal antecedents (valence (33 per cent), expectancy (39 per cent) and self‐efficacy (31 per cent)) whereas the proximal antecedents explained 43 per cent of the variance in goal intentions. In turn, goal intentions were related to training outcomes (affect (b = 0.7), utility (b = 0.6) and transfer intention (b = 0.5)). Goal intentions mediated the relationship between proximal antecedents and training outcomes, providing evidence that goal intentions play a pivotal role in the causal path from proximal factors to training outcomes. Valence alone was found to be a significant mediator of the relationship between goal orientation and goal intentions.     

Tourism's contribution to the economy of Kenya

Between 1963 and 1980, tourism was one of the top three domestic exports of Kenya, along with coffee and tea. In evaluating an export industry, its linkages with other sectors of the economy, its import content, and its role as a source of domestic income and employment should be considered. This paper attempts such an evaluation of Kenya's tourist industry. Between 1968 and 1976, linkages between the tourism sector and domestic agriculture and food processing were improved. The tourist industry was not particularly import intensive in terms of intermediate goods when compared to the economy as a whole. Employment in and wages paid by the tourist industry were below what is expected when compared to tourism's share of GDP.     

A Balancing Act: Work–Life Balance and Multiple Stakeholder Outcomes in Hospitals

This article examines the direct and indirect effects of work–life balance (WLB) practices on multiple stakeholder outcomes in hospitals. The authors examine the direct and indirect effects of WLB practices in 173 hospitals in the United Kingdom on organizational, patient care and employee outcomes. The article proposes a model in which the effects of WLB practices on patient care outcomes and financial performance are mediated by employee turnover intentions. The authors provide strong support for the potential vested in WLB practices in the healthcare setting. Results indicate that greater use of WLB practices enhances outcomes for hospitals, their employees and the patients they care for.