May 20, 2024 This article has been reviewed according to Science X's editorial process and policies . Editors have highlightedthe following attributes while ensuring the content's credibility: fact-checked peer-reviewed publication trusted source proofread by Michelle Klampe, Oregon State University Researchers have developed a new theory of how changing market conditions can lead large numbers of otherwise cautious consumers to buy risky products such as subprime mortgages, cryptocurrency or even cosmetic surgery procedures. These changes can occur in categories of products that are generally low risk when they enter the market.
As demand increases, more companies may enter the market and try to attract consumers with lower priced versions of the product that carry more risk. If the negative effects of that risk are not immediately noticeable, the market can evolve to keep consumers ignorant of the risks, said Michelle Barnhart, an associate professor in Oregon State University's College of Business and a co-author of a new paper. "It's not just the consumer's fault.
It's not just the producer's fault. It's not just the regulator's fault. All these things together create this dilemma," Barnhart said.
"Understanding how such a situation develops could help consumers, regulators and even producers make better decisions when they are faced with similar circumstances in the future." The researchers' findings were recently published in the Journal of Consumer Research . The paper.