2013
DOI: 10.1509/jmr.10.0518
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Subjective Knowledge in Consumer Financial Decisions

Abstract: The authors propose that attempts to increase consumers’ objective knowledge (OK) regarding financial instruments can deter willingness to invest when such attempts diminish consumers’ subjective knowledge (SK). In four studies, the authors use different SK manipulations and investment products to show that investment decisions are influenced by SK, independent of OK. Specifically, they find that (1) willingness to pursue a risky investment increases when SK is high (vs. low) relative to a prior investment cho… Show more

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Cited by 235 publications
(238 citation statements)
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References 41 publications
(82 reference statements)
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“…37,38 This tendency to choose a "known" risk (e.g., continuing without treatment) over an unknown risk (a confusing treatment) is called ambiguity aversion and appears to be driven by people's preference to act in situations where they feel relatively knowledgeable or competent. [39][40][41] Most clinicians have likely dealt with patients that feel overwhelmed when initiating treatment of chronic diseases; ambiguity aversion highlights why these patients may choose inaction instead of following medical advice. In short, when educating patients, it matters not just what information you convey, but how you convey that information.…”
Section: Shortcomings Of Current Strategies To Control Chronic Diseasesmentioning
confidence: 99%
“…37,38 This tendency to choose a "known" risk (e.g., continuing without treatment) over an unknown risk (a confusing treatment) is called ambiguity aversion and appears to be driven by people's preference to act in situations where they feel relatively knowledgeable or competent. [39][40][41] Most clinicians have likely dealt with patients that feel overwhelmed when initiating treatment of chronic diseases; ambiguity aversion highlights why these patients may choose inaction instead of following medical advice. In short, when educating patients, it matters not just what information you convey, but how you convey that information.…”
Section: Shortcomings Of Current Strategies To Control Chronic Diseasesmentioning
confidence: 99%
“…However, despite their potential to increase knowledge and financial literacy, financial education programmes often fail to substantially improve financial decision-making, chiefly because they focus solely on a person's objective level of knowledge (Hadar et al 2013). This is not a new problem; consumer research, for instance, explicitly distinguishes between actual knowledge, defined as 'accurate stored information', and a person's subjective knowledge, which is his or her 'belief about that state of knowledge' (e.g., Moorman et al 2004).…”
mentioning
confidence: 99%
“…In our research, we measure both objective and subjective expertise, but we focus on the results from subjective expertise because "what I think I know" tends to have a more powerful influence on information selection than what one actually knows. Additionally, emerging marketing literature suggests that managers can manipulate subjective expertise levels by varying the way information is presented (Hadar et al 2013). Therefore, our results based on subjective (as well as objective) knowledge should have more meaningful implications for managers.…”
Section: Expertisementioning
confidence: 90%
“…Interestingly, although these studies were conducted using objective measures of expertise, the literature suggests that self-assessed expertise also affects people's behavior, whether it is in a consumer context or in the workplace (e.g., Hadar et al 2013, Morrin et al 2012, Siemsen et al 2007, Thomas-Hunt et al 2003 (Carlson et al 2009). Subjective and objective expertise often lead to similar results since the two constructs can be highly correlated (r = 0 63; Park et al 1994).…”
Section: Expertisementioning
confidence: 99%