IDEAS home Printed from https://ideas.repec.org/a/bla/jconsa/v57y2023i3p1213-1235.html
   My bibliography  Save this article

The psychology of attraction to multi‐level marketing

Author

Listed:
  • Lucas J. Dixon
  • Matthew J. Hornsey
  • Nicole Hartley
  • Cassandra M. Chapman
  • Justin P. Brienza

Abstract

Despite being a risky and controversial business model, little research has investigated personal characteristics that increase attraction to multi‐level marketing business opportunities like Amway and Herbalife. A two‐wave survey (Ntotal = 1503) revealed that attraction to multi‐level marketing opportunities was associated with stronger extrinsic life goals (for becoming rich, famous, and attractive), belief systems related to spirituality and thought‐action fusion (i.e., the belief that thoughts alone create reality), and a cognitive decision‐making style that emphasizes intuitive over rational thinking. Intrinsic psychological needs (e.g., for control and meaning) showed the least consistent associations. Based on these findings, we provide guidance for consumer advocates and policy makers to consider individual psychological factors in education campaigns to improve decision making and participant wellbeing.

Suggested Citation

  • Lucas J. Dixon & Matthew J. Hornsey & Nicole Hartley & Cassandra M. Chapman & Justin P. Brienza, 2023. "The psychology of attraction to multi‐level marketing," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(3), pages 1213-1235, July.
  • Handle: RePEc:bla:jconsa:v:57:y:2023:i:3:p:1213-1235
    DOI: 10.1111/joca.12526
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joca.12526
    Download Restriction: no

    File URL: https://libkey.io/10.1111/joca.12526?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stacie Bosley & Maggie Knorr, 2018. "Pyramids, Ponzis and fraud prevention: lessons from a case study," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 25(1), pages 81-94, January.
    2. Eric Luis Uhlmann & Anthony Bastardi & Lee Ross, 2011. "Wishful Thinking: Belief, Desire, and the Motivated Evaluation of Scientific Evidence," Post-Print hal-00609541, HAL.
    3. Andrew M. Baker & George P. Moschis & Fon Sim Ong & Ra-Pee Pattanapanyasat, 2013. "Materialism and Life Satisfaction: The Role of Stress and Religiosity," Journal of Consumer Affairs, Wiley Blackwell, vol. 47(3), pages 548-563, November.
    4. Fu Dai & Stephen T. T. Teo & Karen Yuan Wang, 2017. "Network Marketing Businesses and Chinese Ethnicity Immigrants in Australia," Journal of Small Business Management, Taylor & Francis Journals, vol. 55(3), pages 444-459, July.
    5. Rajesh Iyer & James A. Muncy, 2016. "Attitude toward Consumption and Subjective Well-Being," Journal of Consumer Affairs, Wiley Blackwell, vol. 50(1), pages 48-67, March.
    6. Shaul M. Gabbay & Roger Th. A. J. Leenders, 2003. "Creating Trust through Narrative Strategy," Rationality and Society, , vol. 15(4), pages 509-539, November.
    7. Bosley, Stacie A. & Bellemare, Marc F. & Umwali, Linda & York, Joshua, 2019. "Decision-making and vulnerability in a pyramid scheme fraud," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 80(C), pages 1-13.
    8. Victor Stango & Jonathan Zinman, 2009. "Exponential Growth Bias and Household Finance," Journal of Finance, American Finance Association, vol. 64(6), pages 2807-2849, December.
    9. Matthew D. Meng & Mitchell C. Olsen, 2022. "Market segmentation strategies can be used to overcome COVID‐19 vaccine hesitancy and other health crises," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 957-968, June.
    10. repec:cup:judgdm:v:15:y:2020:i:4:p:476-498 is not listed on IDEAS
    11. Claudia Groß & Dirk Vriens, 2019. "The Role of the Distributor Network in the Persistence of Legal and Ethical Problems of Multi-level Marketing Companies," Journal of Business Ethics, Springer, vol. 156(2), pages 333-355, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Austin M. Miller & Samantha Snyder & Stacie A. Bosley & Sarah Greenman, 2023. "Income disclosure and consumer judgment in a multilevel marketing experiment," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 92-120, January.
    2. Feng, Pihu & Lu, Xin & Gong, Zaiwu & Sun, Duoyong, 2021. "A case study of the pyramid scheme in China based on communication network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 565(C).
    3. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan, 2018. "Can financial literacy reduce anxiety about life in old age?," Journal of Risk Research, Taylor & Francis Journals, vol. 21(12), pages 1533-1550, December.
    4. Asen Ivanov, 2021. "Optimal pension plan default policies when employees are biased," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(3), pages 583-596, June.
    5. Goda, Gopi Shah & Manchester, Colleen Flaherty & Sojourner, Aaron J., 2014. "What will my account really be worth? Experimental evidence on how retirement income projections affect saving," Journal of Public Economics, Elsevier, vol. 119(C), pages 80-92.
    6. Goda, Gopi Shah & Levy, Matthew R. & Flaherty Manchester, Colleen & Sojourner, Aaron & Tasoff, Joshua & Xiao, Jiusi, 2023. "Are retirement planning tools substitutes or complements to financial capability?," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 561-573.
    7. Noviarini, Jelita & Coleman, Andrew & Roberts, Helen & Whiting, Rosalind H., 2023. "Financial literacy and retirees' resource allocation decisions in New Zealand," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    8. Florian Deuflhard & Dimitris Georgarakos & Roman Inderst, 2019. "Financial Literacy and Savings Account Returns," Journal of the European Economic Association, European Economic Association, vol. 17(1), pages 131-164.
    9. Despina Gavresi & Anastasia Litina & Christos A. Makridis, 2024. "Split personalities? Behavioral effects of temperature on financial decision‐making," Kyklos, Wiley Blackwell, vol. 77(3), pages 664-689, August.
    10. Dohmen, Thomas & Falk, Armin & Huffman, David & Marklein, Felix & Sunde, Uwe, 2009. "Biased probability judgment: Evidence of incidence and relationship to economic outcomes from a representative sample," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 903-915, December.
    11. Sabyasachi Chakraborty & Satyabrata Aich & Hee-Cheol Kim, 2021. "A Novel Sleep Scoring Algorithm-Based Framework and Sleep Pattern Analysis Using Machine Learning Techniques," International Journal of System Dynamics Applications (IJSDA), IGI Global, vol. 10(3), pages 1-20, July.
    12. David Blake, 2022. "Nudges and Networks: How to Use Behavioural Economics to Improve the Life Cycle Savings-Consumption Balance," JRFM, MDPI, vol. 15(5), pages 1-17, May.
    13. Maite Blázquez & Santiago Budría, 2018. "The Effects of Over-indebtedness on Individual Health," Hacienda Pública Española / Review of Public Economics, IEF, vol. 227(4), pages 103-131, December.
    14. Sandro Ambuehl & B. Douglas Bernheim & Annamaria Lusardi, 2022. "Evaluating Deliberative Competence: A Simple Method with an Application to Financial Choice," American Economic Review, American Economic Association, vol. 112(11), pages 3584-3626, November.
    15. Gangwar, Rachna & Singh, Ritvik, 2018. "Analyzing Factors Affecting Financial Literacy and its Impact on Investment Behavior among Adults in India," MPRA Paper 89452, University Library of Munich, Germany.
    16. Matthew R Levy & Joshua Tasoff, 2016. "Misunderestimation: exponential-growth bias and time-varying returns," Economics Bulletin, AccessEcon, vol. 36(1), pages 29-34.
    17. Benjamin Enke & Thomas Graeber & Ryan Oprea & Thomas W. Graeber, 2023. "Complexity and Hyperbolic Discounting," CESifo Working Paper Series 10861, CESifo.
    18. Johan Almenberg & Artashes Karapetyan, 2009. "Mental accounting in the housing market," IEW - Working Papers 453, Institute for Empirical Research in Economics - University of Zurich.
    19. Qayyum, Abdul & Jamil, Raja Ahmed & Shah, Adnan Muhammad & Lee, KangYoon, 2023. "Inclusive advertising featuring disability on instagram: Effect on consumer well-being, brand engagement, and purchase intention," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    20. Grohmann, Antonia, 2018. "Financial literacy and financial behavior: Evidence from the emerging Asian middle class," Pacific-Basin Finance Journal, Elsevier, vol. 48(C), pages 129-143.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jconsa:v:57:y:2023:i:3:p:1213-1235. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-0078 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.