Year: 2023
Type: dissertation
Study design: Observational Study
Abstract: This dissertation aims to address the academic gap in the literature of referral behavior: financial incentives stimulate referral behavior and yet people do not recommend even when financial incentives are presented.This paper focuses on the psychological process that goes on when recommendation behavior is involved.That is, before recommending, people go through a thought process of weighing the costs and benefits of the action.To articulate this process in a more systematic way, the exchange theory framework is adopted.The exchange theory posits that a social behavior in the interaction of two parties happens only after there is a cost-benefit analysis to determine risks and benefits of the action.Based on the exchange theory framework, the motivational factors to recommend are mapped by two axes: Economic vs. Social, and Benefit vs. Cost.Firstly, economic benefit refers to the size of financial incentive given by the referral reward programs.Economic cost refers to the referrer's time and effort put in making the referral.Social benefit refers to positive metaperception and Social cost refers to negative metaperception.Therefore, a dilemma arises when making a referral as these components clash.The concept of metaperception has recently started to gain interest in the referral behavior literature.Metaperception, simply put, refers to how people think others view them.In this paper, metaperception is examined in more detail, as the positive and negative dimensions are conceptualized separately.In the context of referral behavior, positive metaperception takes place when the recommendation giver assumes that the receiver and others will think positively of the giver who gave the recommendation.As the giver is seen as someone who helps out others to make the best choice, and prevent people from wasting time and effort.On the contrary, negative metaperception occurs when the recommendation giver thinks that others (including the receiver) will think ill of the giver when making a recommendation.This is in alignment with other studies where once financial incentives are introduced the motivation of recommending is no longer seen as altruistic.This presents an unique opportunity to investigate the concurring process in opposite directions.In other words, when positive metaperception and negative metaperception both are present to the recommendation giver, putting the giver in a conflicted status on whether to recommend or not.Building from extant literature, this paper argues that the size of financial incentives positively affects the likelihood to recommend.As for the conflicting thought process behind recommending, this paper argues that the size of financial incentives leads to negative metaperception which hinders referral behavior.On the other hand, positive metaperception encourages referral behavior.Furthermore, the complexity of referral behavior is examined through the concept of effort and time the referrer is asked to put in when making a recommendation.It is expected that when high level of time and effort is required, the more monetary incentive the more likely one would recommend and vice versa.Whereas, when high level of time and effort is required, the positive effect that positive metaperception has on the likelihood of referral is lessened.Structural Equation Modeling was performed using Smart 4.0 PLS-SEM.Data was gathered through survey.The number of total respondents were 397, but only 206 responds were viable for our research purpose.For the moderating effect, also simple slope analysis was performed to visually understand the moderating effect.The results show that, there is a statistically significant relationship, that is, financial incentives do have a positive effect on the likelihood to recommend.Positive metaperception also turned out to have a statistically significant effect on referral likelihood in a positive way.All moderating effects were also found to have a statistically significant relationship as expected.However, the relationship among incentive size, negative metaperception, and referral likelihood did not show a statistically significant result.This could be a subject for future research.
Author: 정상윤
Institution: Seoul National University
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6981280528