a theory of consumer’s perceived risk under the halo effect

Despite being largely tackled by a manifold of sciences, perceived risk is still a rather unclear concept concerning its formation and update. In today’s economy, where poor purchase decisions are so easy to make, consumers have developed mental shields residing in actions based on perceived risk. This paper develops and tests a theory of perceived risk formation under the halo effect, based on correlation analysis in two forms: rankings individuals on their contribution to the correlations increase and partial correlations. Both internal and external halo effects were found, emerging from the perceived risk component – functional risk, financial risk, social risk, physical risk, psychological risk and time risk –, brand attitude, product category attitude, consumer’s regret, others’ regret expressed through word-of-mouth, recency, and awareness of awareness. The intricate halo that was revealed needs further attention from the scientific community in order to better delimit halo sources and, eventually, to explain its variability.