Enhancing Trustworthiness to Gain Sustainable Development: The Signaling Effect of Voluntary "Hostage Posting" on Consumer Behavior

• Main Authors: Ewe, Soo Yeong, Watabe, Motoki
• Format: Conference Proceeding
• Language: English
• Subjects: Consumer behavior; Consumers; COVID-19; Sales; Trust
• ISSN: 0098-9258

The impact of Covid-19 has been accelerating consumers' purchasing to change from face to face to online in the world. At the online platforms, consumers have to depend more on the provided information on websites, which is controlled by sellers. Online purchase potentially increases such asymmetry of information, leading for customers to distrust and indecisive on purchasing. Therefore, how to reduce the uncertainty to develop trust from potential customers for sales increase should be worth to investigate. One way to develop consumers' trust is to voluntarily provide self-sanctioning to signal that the company will compensate consumers if the products do not perform as desired (Nakayachi & Watabe, 2005). Hostage posting (HP) is a commonly used concept in Economics, which refers to a self-sanctioning system in an uncertain situation (Schelling, 2006; Yamagishi, 2011). It would be an effective signal to develop trust from consumers because the self-sanctioning imposes costs to provide and maintain, and it is costly for the company if they do not keep to their promise (Raub, 2004). Since Nakayachi & Watabe (2005) did not examine the HP effects under a buying behaviour context, it is not clear that their argument is the case in consumer service. This research aims to examine the direct effect of voluntary HP on consumer's buying intention, and perceived trust on two types of products with different warranty effect, i.e. sim card and air-conditioner. The other purpose is to examine the moderating effect of group polarization on the voluntary hostage-posting effects. Group polarization refers to a phenomenon that the opinion of a group after a discussion will tend to be more extreme than the initial opinions of individuals before the discussion (Chen et al., 2001). In addition, this shift of group decision also shifts individual decision toward the same extreme way, known as "risky shift/ cautious shift." Thus, if individuals have chance to group discussion via online communication, the voluntary HP could have more effects on each individual after the discussion. As this possibility has not been tested in the current literature, this research also aims to examine the hypothesis that group polarization would amplify the effect of voluntary HP. Through experimental approach, this research hypothesized that : Hypothesis la: Voluntary HP will increase intention to buy the product compared with non-voluntary HP. Hypothesis lb: The above effect will be stronger with