This research explores consumer loneliness and its resulting preference for mnemonic features as the psychological antecedents of social media use and studies its consequence on consumer behavior. To test our hypotheses, we conducted a survey with a large sample (N = 1307) and analyzed the data using PLS structural equation modeling method. We show that individuals with higher (vs. lower) feelings of loneliness show a lower (vs. higher) affinity to mnemonic features of social media platforms, making them more likely to use Snapchat (vs. Facebook). This effect persists after controlling for demographic factors (such as age and gender) and other known motivations behind social media choice. These two groups of social media users also exhibit different types of consumer behavior resulting from their underlying affinity to mnemonic features. Snapchat users tend to be more variety‐seeking and prefer newer brands (vs. established brands) than Facebook users. Our research contributes to the literature on the adoption of social media platforms by studying an important individual difference variable and integrating the concept of mnemonic features of social media as a key driving factor in that choice. The findings can give managers essential insights into the usership of social media platforms and help them select the right platform for their social media campaigns.
Two studies replicate the anomaly identified by Frederick, Meyer and Levis (2015) and Frederick, Levis, Malliaris and Meyer (2018). People show typical risk averse behavior by valuing risk below the focal lottery’s expected value, but they do not bid above its expected value for the hedge that eliminates the risk. Following the authors, we conduct finer analyses by separating participants into two groups – “experts” who understand that acquiring the hedge makes winning certain versus “novices” who do not understand the winning implications of acquiring the hedge. We find that (1) “experts” are more inclined to purchase the hedge compared to the “novices” and (2) unlike the “novices,” they value the hedge significantly more than the risk instrument, but only if they are given the risk instrument free of charge. However, even there, the hedge valuations are significantly less than the lottery’s expected value suggesting that the anomaly described in Frederick et al. (2015, 2018) is robust and likely to affect the way our discipline conceptualizes and models risk behavior.
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