Recent Research Shows That the Amount of a Guarantee Payout

question 30

Multiple Choice

Recent research shows that the amount of a guarantee payout has no effect on consumer cheating. Which of the following is one of the important managerial implications of this?

• A)Guarantees can be restricted to new customers because of the propensity for repeat customers to cheat.
• B)Guarantees can be kept low to prevent rewarding cheaters.
• C)Managers can reap the marketing rewards of higher guarantees without increased payouts due to consumer cheating.
• D)Managers cannot expect to recover the difference in guarantees for different types of consumers.
• E)Guarantee levels can be used to dissuade consumer cheating.

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Definitions:

Response Inhibition

The ability to suppress actions that are inappropriate or no longer required, a crucial aspect of executive functioning and self-control.

Formal Operational

A stage in cognitive development, as proposed by Jean Piaget, where individuals are able to think abstractly, reason logically, and understand hypothetical concepts.

Concrete Operational

A stage in Piaget's theory of cognitive development where children begin to think logically about concrete events.

Preoperational

A stage in Piaget's theory of cognitive development, typically from ages 2 to 7, where children begin to engage in symbolic play and struggle with logic and taking the perspective of others.