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.

---

Definitions:

Liable

Legally responsible or obligated to answer for actions or to compensate for harm or damage caused.

Misrepresents

Providing false or misleading information or statements.

Legal Right

A legal right is an entitlement or permission backed by law or legal principles.

Disaffirm

The legal act of declaring a contract voidable, renouncing or refusing to recognize an engagement.