Does Online Community Participation Foster Risky Financial Behavior?
Utpal M. Dholakia
Rice University - Jesse H. Jones Graduate School of Business
University of British Columbia (UBC) - Sauder School of Business
University of Zurich
September 12, 2011
Although consumers increasingly use online communities for various activities, little is known regarding how participation in them affects individuals’ decision making strategies. Through a series of field and laboratory studies, we demonstrate that participation in an online community increases risk seeking tendency of individuals in financial decisions and behaviors. Our results reveal that participation in an online community leads consumers to perceive support from other members, that is they believe they will be helped by other community members should difficulties arise. Such a perception leads online community members to make riskier financial decisions than non-participants. We also discover a boundary condition to the effect: online community members are more risk seeking only when they have relatively strong ties with other members; when ties are weak, they exhibit similar risk preferences as non-members.
Number of Pages in PDF File: 47
Keywords: Online Community Participation, Risk Preferences, Risky Financial Behavior
Date posted: September 14, 2011