The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Default user image.

Linda Hollebeek

Visiting professor

Default user image.

Social isolation and risk-taking behavior : The case of COVID-19 and cryptocurrency

Author

  • Thusyanthy Lavan
  • Brett A.S. Martin
  • Weng Marc Lim
  • Linda D. Hollebeek

Summary, in English

This study examines the impact of social isolation on risk-taking behavior in highly uncertain environments with the potential for significant gains and losses. We uncover both direct and indirect effects of social isolation on risk-taking behavior, mediated through perceived stress, sense of control, and neuroticism. The COVID-19 pandemic provides a pertinent context to explore these dynamics, while the volatile cryptocurrency market serves as a topical context for investigation. The analysis based on covariance-based structural equation modeling (CB-SEM) of survey responses from 216 consumers reveals that social isolation significantly increases risk-taking behavior, primarily mediated by heightened perceived stress. Contrary to expectations, sense of control and neuroticism did not mediate this relationship, indicating specific pathways through which isolation affects risk decision. This finding suggests that while social isolation intensifies perceived stress, yielding riskier purchase decisions, it does not universally impact other psychological aspects like resilience (sense of control) or vulnerability (neuroticism). The observed direct (main) and indirect (mediation) effects highlight the importance of targeted interventions to address psychological well-being, particularly at times of enforced isolation. Understanding these dynamics can help advisors (e.g., financial consultants), marketers, and policymakers (e.g., government agencies/lawmakers) formulate strategies to curb excessive risk-taking among isolated individuals, particularly in high-risk financial settings.

Department/s

  • Marketing

Publishing year

2024-11

Language

English

Publication/Series

Journal of Retailing and Consumer Services

Volume

81

Document type

Journal article

Publisher

Elsevier

Topic

  • Business Administration

Keywords

  • COVID-19 pandemic
  • Cryptocurrency
  • Neuroticism
  • Perceived stress
  • Risk-taking behavior
  • Sense of control
  • Social isolation

Status

Published

ISBN/ISSN/Other

  • ISSN: 0969-6989