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This paper aims to explore how authentic corporate social responsibility (CSR) activities can serve as a proactive service recovery tool and shield service providers from the negative consequences of service failures. Specifically, the authors investigate the conditions under which such activities can encourage conciliatory behavior among aggrieved consumers and how adding reactive service recovery tools to the mix interferes with the process.

The authors conduct three experiments on an online panel and college student participants. The authors present a service failure scenario at a restaurant (late/subpar food delivery); vary the restaurant’s CSR activity (authentic, inauthentic or nonexistent); and test CSR’s impact on conciliatory behavior, the underlying mechanisms and how reactive service recovery tactics (apology/compensation) moderate the process.

The authors find that authentic-CSR activities (relative to inauthentic or no-CSR activities) indirectly promote conciliatory behavior by (serially) making the failure appear as a onetime event and lessening consumer anger toward the service provider. However, the process gets disrupted when the authors add an apology/compensation to the mix, ostensibly because the latter is a more direct signal that the failure is a onetime problem.

To the best of the authors’ knowledge, this is the first study that tests how authentic-CSR activities can serve as a proactive service recovery tool and encourage conciliatory behavior among aggrieved consumers (a serial mediation process). The authors add value by showing that the process cuts across cultures (with participants from the USA and Turkey) and that CSR activities are indispensable when customers do not complain but simply exit the firm.

Service providers often recommend unnecessary and expensive services to unsuspecting consumers, such as recommending a new part when a simple fix to the old will do, a phenomenon known as overprovisioning. The purpose of this paper is to examine to what extent consumers tend to defer their decisions should they suspect that sellers are overproviding services to them and they cannot prevent the sellers from doing so (they lack personal control); and how proper market signals can mitigate such suspicions, restore personal control and reduce deferrals.

The paper conducts three laboratory experiments. The experiments expose the participants to hypothetical repair scenarios and measure to what extent they suspect that sellers might be overproviding services to them and they feel that they lack the personal control to prevent the sellers from doing so. Thereafter, the experiments expose them to two different market signals, one conveying that the seller is providing quality services (a repair warranty; quality signal) and the other conveying that the seller is taking away any incentives their agents (technicians) may have to overprovide services (the technicians are paid a flat salary; quantity signal). The paper examines how these quality/quantity signals are able to reduce overprovisioning suspicions, restore personal control and reduce decision deferrals.

The paper has two main findings. First, the paper shows a mediation process at work i.e. suspecting potential overprovisioning by sellers leads consumers to defer their decisions indirectly because they feel that they lack personal control to prevent the sellers from doing so. Second, the paper shows that the quantity signal (flat salary disclosure), but not the quality signal (warranty), is able to mitigate suspicions of overprovisioning, restore personal control and reduce decision deferrals.

The paper suggests that although buyers may rely on quality signals to assure them of superior service, these signals do not guarantee that the quantity of service they are receiving is appropriate. Therefore, sellers will have to send a credible quality signal and a credible quantity signal to the consumers if they wish to tackle suspicions about service overprovision and service quality.

The paper is original in two ways. First, the paper theorizes and tests a mediation process model whereby quality/quantity signals differentially mitigate overprovisioning suspicions, restore personal control and reduce decision deferrals. Second, the paper speaks to the necessity of expanding the traditional signaling literature, designed primarily to detect poor quality hidden in the products/services of lower-quality sellers, to include detecting/solving overprovisioning often hidden in the services provided by higher-quality sellers.

When a product fails out of negligence on the seller’s part, consumers can either retaliate against the seller, more so if a third party encourages them to do so, or forgive the seller should the seller express remorse. This paper aims to examine how the fit between the consumer’s promotion/prevention regulatory orientation and the promotion/prevention frame of a message of contrition (retaliation), such as an apology from a chief executive officer (CEO) (a class action suit threat by a lawyer), affects such forgiveness (retaliation) intentions in the form of product repurchase decisions.

In two laboratory experiments, this paper temporally induces a promotion or prevention orientation in the study participants and thereafter ask them to imagine experiencing a product failure and listening to (1) the CEO apologize for the harm (eliciting sympathy/encouraging repurchase); or (2) a lawyer inviting them to seek damages for the harm (eliciting anger/discouraging repurchase). This paper frames the messages from the CEO/lawyer such that they fit either with a promotion mindset or with a prevention mindset.

This paper finds that, following a message of apology, a frame-focus fit (compared to a frame-focus misfit) elicits sympathy and encourages repurchase universally across promotion and prevention-oriented consumers. However, following a message encouraging retaliation, the same fit elicits anger and discourages repurchase more among prevention-oriented than promotion-oriented consumers.

Although past research has investigated how regulatory fit affects forgiveness intentions, this paper fills three research gaps therein by (a) addressing both forgiveness and retaliation intentions, (b) deconstructing the fit-induced “just right feelings” by exploring their underlying emotions of sympathy and anger, and (c) showing that fit effects are not universal across promotion and prevention-oriented consumers. For practice, the results suggest that managers can lessen the fallout from product failures by putting consumers in a promotion mindset that strengthens the effect of a promotion-framed apology and inoculates them against all types of retaliatory messages.

When offering product/service bundles to customers, marketers must decide how best to configure the bundles such that consumers do not find the bundle‐choice particularly difficult. This paper examines perceived decision difficulty in selecting from a menu of bundles, where the bundles vary on the number of component services, the number of unique services between competing bundles, and their perceived similarity. It is found that larger bundles make decisions more difficult, more unique services between the competing bundles increases decision difficulty for small, but not large, bundles and similar bundles pose greater choice difficulty than dissimilar bundles. Implications of the results are discussed.

The purpose of this study is to examine if consumers, after missing a price discount on a desired product, prefer to buy the latter at a smaller discount or prefer to pay full price but offset some of it with windfall money.

In four experiments, participants imagine that they have missed an opportunity to buy a box of chocolates at $50 off and are offered a second chance to buy them at a less attractive discount ($25) or pay full price, but partially offset the full price with various windfall lotteries ($25, $50, $75) and gift cards ($50).

Participants are more likely to buy the chocolates at the less attractive (second) discount rather than pay full price using windfall money. In doing so, they show that they are willing to be more, rather than less, poor from an overall wealth perspective to acquire the chocolates. This anomaly surfaces irrespective of the windfall amounts or preference elicitation methods (joint versus separate evaluation). The negative transaction utility of paying full price mediates the purchase method effect (discount versus windfall) on purchase likelihood, but gift cards are able to reduce the negative transaction utility of paying full price.

The research reveals a judgmental anomaly in how consumers assess product acquisition value following a lost opportunity and suggests that marketing managers may be able to reduce consumer inertia by strategically matching rewards with the source of the lost chance.

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.

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.

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).

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.

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.

The purpose of this paper is to extend the conclusions of a previous synthesis of attraction effect research (1995), focusing on the influence of background and design variables on the magnitude of the effect, and to identify additional factors that question the effect’s practical market relevance.

Meta-analysis and moderator analysis (meta-regression) are used to summarize the findings and assess the explanatory power of background variables on the magnitude of the attraction effect.

Analyses indicate significant effects for procedure and the pre-entrant target percentage in addition to decoy type and decoy location found in previous synthesis. These factors explain 16 per cent of the variance. Previous findings that between-subject designs result in stronger attraction effects are not substantiated. Viable decoys led to a reversal of the attraction effect.

This research contributes conceptually by demonstrating that the attraction effect is sensitive to research design factors which in some cases reverse the effect. This suggests that the underlying theory needs qualification and that generalizability may be limited. Given the constraints of meta-analysis, design factors that are idiosyncratic to a single study or are constant across studies could not be tested.

This research suggests that for the attraction effect to have practical relevance, knowledge of the effect needs updating because critical realities in the marketplace have been somewhat ignored by researchers in building theories regarding this effect.

By focusing on background variables that can moderate the magnitude of the attraction effect, the authors open a venue to expand the theoretical understanding and the practical relevance of the attraction effect in marketing.