Purpose – The paper aims to investigate the role of uncertainty avoidance (UA) as a moderator of Prospect Theory’s reflection effect (i.e. the simultaneous choice of a sure gain and a risky loss). We expect that higher-UA consumers, seeking certainty, will shun risk across both gains and losses such that their choices will be inconsistent with the reflection effect. Design/methodology/approach – We report three studies in which participants choose between risk and certainty. We use the stimuli from the original Prospect Theory paper, measure UA using an individual-level scale and conduct controlled experimental (laboratory) studies. Findings – We show that, compared to lower-UA consumers, higher-UA consumers demonstrate the reflection effect less frequently in a variety of settings (small/large stakes and within/between subjects comparisons). Mediation tests reveal that higher-UA consumers anchor on the sure loss and stay with their choice because they prefer the certainty of the sure (smaller) loss to the possibility of a possible (larger) loss (a dual-mediation mechanism). Research limitations/implications – The results have important implications for marketing practice. They show that quantifying uncertainty into a probability number is not enough to eliminate the uncertainty of the situation, and that UA is likely serve as a boundary condition to many of the traditional heuristics of judgment and decision-making. Originality/value – This is the first paper to demonstrate that UA can moderate the reflection effect (using the stimuli in the original Prospect Theory paper). Therefore, it sets an agenda for future researchers who may want to use these findings to calibrate price/uncertainty tradeoffs within higher-UA segments.
Journal of Consumer Marketing – Emerald Publishing
Published: Aug 5, 2014
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera