Rutgers School of Business–Camden faculty member Robert Schindler has earned acceptance in the Journal of Public Policy & Marketing for his forthcoming research examining how consumers make decisions about extended warranties. Co-authored with Michael S. Isaac, the study sheds new light on why many consumers choose to purchase extended warranties and the psychological factors influencing those decisions.
Their research finds that many consumers who purchase extended warranties believe the decision will ultimately be financially beneficial, expecting a positive return on investment. Notably, this perception is even stronger among consumers with a higher affinity for gambling, suggesting that risk-related preferences play a meaningful role in warranty purchasing behavior.
Beyond consumer psychology, the study carries important public policy and societal implications. Extended warranties are disproportionately purchased by lower-income consumers, raising concerns about how expectations of financial “wins” may influence spending decisions among vulnerable populations. The findings offer valuable insights for policymakers, consumer advocates, and marketers seeking to improve transparency and protect consumers from potentially misleading financial assumptions.
Schindler, R. M. & Isaac, M. S. (forthcoming). The illusion of victory: How gambling affinity influences extended-warranty decisions. Journal of Public Policy & Marketing.