How the Interplay Between Subjective and Objective Financial Risk Influences Consumers’ Expectations, Information Search, and Product Satisfaction

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Abstract

Consumer risk taking is central to much of the financial market literature and a deeper understanding of consumer risk behavior is essential for advancing research and managers’ and authorities’ thought and policy. Yet, relatively little research has considered the interplay between subjective financial risk (i.e., the level of risk perceived by consumers) and objective financial risk (i.e., the level of risk as stated by financial authorities) on consumer financial behavior. Based on cognitive consistency theory and cognitive congruence theory as theoretical underpinnings, we develop a conceptual model hypothesizing relationships between subjective and objective risk and consumers’ expectations, information search (from both financial and non-financial sources), and product satisfaction. This study distinguishes between high objective risk savings products (HRSP) (i.e., stocks) and low objective risk savings products (LRSP) (i.e., bank saving accounts). In the study, 269 respondents had obtained a HRSP and 573 respondents had obtained a LRSP. In the pooled sample of respondents (n=842), 46.6% were women and average age was 54.5 years. Structural equation modelling estimated the results. The results suggest that the negative influence of perceived risk on expectations was significantly higher for LRSP than for HRSP and also that the negative influence of perceived risk on product satisfaction was significantly higher for LRSP than for HRSP. Also, the positive influence of perceived risk on information search from non-financial sources was higher for HRSP than for LRSP. Several implications for future research, alongside with managerial and financial authority implications, are discussed.
Original languageEnglish
Title of host publicationProceedings of the 18th International Marketing Trends Conference 2019
EditorsJean-Claude Andreani, Umberto Collesei
Number of pages17
Place of PublicationParis-Venice
PublisherMarketing Trends Association
Publication date2019
ISBN (Print)9782490372065
Publication statusPublished - 2019
EventThe 18th International Marketing Trends Conference - Venice, Italy
Duration: 17 Jan 201919 Jan 2019
Conference number: 18

Conference

ConferenceThe 18th International Marketing Trends Conference
Number18
CountryItaly
CityVenice
Period17/01/201919/01/2019

Keywords

  • Subjective risk
  • Objective risk
  • Expectations
  • Information search
  • Product satisfaction

Cite this

Hansen, T., Geersbro, J., & Pico Larsen, H. (2019). How the Interplay Between Subjective and Objective Financial Risk Influences Consumers’ Expectations, Information Search, and Product Satisfaction. In J-C. Andreani, & U. Collesei (Eds.), Proceedings of the 18th International Marketing Trends Conference 2019 Paris-Venice: Marketing Trends Association.
Hansen, Torben ; Geersbro, Jens ; Pico Larsen, Hanne. / How the Interplay Between Subjective and Objective Financial Risk Influences Consumers’ Expectations, Information Search, and Product Satisfaction. Proceedings of the 18th International Marketing Trends Conference 2019. editor / Jean-Claude Andreani ; Umberto Collesei. Paris-Venice : Marketing Trends Association, 2019.
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abstract = "Consumer risk taking is central to much of the financial market literature and a deeper understanding of consumer risk behavior is essential for advancing research and managers’ and authorities’ thought and policy. Yet, relatively little research has considered the interplay between subjective financial risk (i.e., the level of risk perceived by consumers) and objective financial risk (i.e., the level of risk as stated by financial authorities) on consumer financial behavior. Based on cognitive consistency theory and cognitive congruence theory as theoretical underpinnings, we develop a conceptual model hypothesizing relationships between subjective and objective risk and consumers’ expectations, information search (from both financial and non-financial sources), and product satisfaction. This study distinguishes between high objective risk savings products (HRSP) (i.e., stocks) and low objective risk savings products (LRSP) (i.e., bank saving accounts). In the study, 269 respondents had obtained a HRSP and 573 respondents had obtained a LRSP. In the pooled sample of respondents (n=842), 46.6{\%} were women and average age was 54.5 years. Structural equation modelling estimated the results. The results suggest that the negative influence of perceived risk on expectations was significantly higher for LRSP than for HRSP and also that the negative influence of perceived risk on product satisfaction was significantly higher for LRSP than for HRSP. Also, the positive influence of perceived risk on information search from non-financial sources was higher for HRSP than for LRSP. Several implications for future research, alongside with managerial and financial authority implications, are discussed.",
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Hansen, T, Geersbro, J & Pico Larsen, H 2019, How the Interplay Between Subjective and Objective Financial Risk Influences Consumers’ Expectations, Information Search, and Product Satisfaction. in J-C Andreani & U Collesei (eds), Proceedings of the 18th International Marketing Trends Conference 2019. Marketing Trends Association, Paris-Venice, Venice, Italy, 17/01/2019.

How the Interplay Between Subjective and Objective Financial Risk Influences Consumers’ Expectations, Information Search, and Product Satisfaction. / Hansen, Torben; Geersbro, Jens; Pico Larsen, Hanne.

Proceedings of the 18th International Marketing Trends Conference 2019. ed. / Jean-Claude Andreani; Umberto Collesei. Paris-Venice : Marketing Trends Association, 2019.

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

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AU - Pico Larsen, Hanne

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N2 - Consumer risk taking is central to much of the financial market literature and a deeper understanding of consumer risk behavior is essential for advancing research and managers’ and authorities’ thought and policy. Yet, relatively little research has considered the interplay between subjective financial risk (i.e., the level of risk perceived by consumers) and objective financial risk (i.e., the level of risk as stated by financial authorities) on consumer financial behavior. Based on cognitive consistency theory and cognitive congruence theory as theoretical underpinnings, we develop a conceptual model hypothesizing relationships between subjective and objective risk and consumers’ expectations, information search (from both financial and non-financial sources), and product satisfaction. This study distinguishes between high objective risk savings products (HRSP) (i.e., stocks) and low objective risk savings products (LRSP) (i.e., bank saving accounts). In the study, 269 respondents had obtained a HRSP and 573 respondents had obtained a LRSP. In the pooled sample of respondents (n=842), 46.6% were women and average age was 54.5 years. Structural equation modelling estimated the results. The results suggest that the negative influence of perceived risk on expectations was significantly higher for LRSP than for HRSP and also that the negative influence of perceived risk on product satisfaction was significantly higher for LRSP than for HRSP. Also, the positive influence of perceived risk on information search from non-financial sources was higher for HRSP than for LRSP. Several implications for future research, alongside with managerial and financial authority implications, are discussed.

AB - Consumer risk taking is central to much of the financial market literature and a deeper understanding of consumer risk behavior is essential for advancing research and managers’ and authorities’ thought and policy. Yet, relatively little research has considered the interplay between subjective financial risk (i.e., the level of risk perceived by consumers) and objective financial risk (i.e., the level of risk as stated by financial authorities) on consumer financial behavior. Based on cognitive consistency theory and cognitive congruence theory as theoretical underpinnings, we develop a conceptual model hypothesizing relationships between subjective and objective risk and consumers’ expectations, information search (from both financial and non-financial sources), and product satisfaction. This study distinguishes between high objective risk savings products (HRSP) (i.e., stocks) and low objective risk savings products (LRSP) (i.e., bank saving accounts). In the study, 269 respondents had obtained a HRSP and 573 respondents had obtained a LRSP. In the pooled sample of respondents (n=842), 46.6% were women and average age was 54.5 years. Structural equation modelling estimated the results. The results suggest that the negative influence of perceived risk on expectations was significantly higher for LRSP than for HRSP and also that the negative influence of perceived risk on product satisfaction was significantly higher for LRSP than for HRSP. Also, the positive influence of perceived risk on information search from non-financial sources was higher for HRSP than for LRSP. Several implications for future research, alongside with managerial and financial authority implications, are discussed.

KW - Subjective risk

KW - Objective risk

KW - Expectations

KW - Information search

KW - Product satisfaction

KW - Subjective risk

KW - Objective risk

KW - Expectations

KW - Information search

KW - Product satisfaction

M3 - Article in proceedings

SN - 9782490372065

BT - Proceedings of the 18th International Marketing Trends Conference 2019

A2 - Andreani, Jean-Claude

A2 - Collesei, Umberto

PB - Marketing Trends Association

CY - Paris-Venice

ER -

Hansen T, Geersbro J, Pico Larsen H. How the Interplay Between Subjective and Objective Financial Risk Influences Consumers’ Expectations, Information Search, and Product Satisfaction. In Andreani J-C, Collesei U, editors, Proceedings of the 18th International Marketing Trends Conference 2019. Paris-Venice: Marketing Trends Association. 2019