We Are All In This Together: The Effect of Shared Fate on Feelings of Security and Risk Tolerance

Uncontrollable events, such as economic, social, or environmental calamities, as well as smaller-scale events unavoidable by consumers’ own due care frequently impact them as a unit and expose them to possible harm. To examine how consumer responses are shaped by contexts characterized by co-experienced exposure to harm, we introduce to the marketing literature the concept of shared fate and proffer that salient perceptions of shared fate produce feelings of security that guide consumers’ risk tolerance. Importantly, given mutual dependence and a probable alignment of interests among group members following exposure to harm, perceptions of shared fate and, in turn, feelings of security will depend on the size of the exposed group – even in instances when group size is irrelevant to the individual consumer’s vulnerability. A series of studies supports our theory and casts doubt on a viable alternative explanation suggesting that larger versus smaller groups represent stronger cues of social proof. Theoretically, we thereby extend current work on irrational beliefs and personal fate by advancing the notion of shared fate and its heretofore unexamined and unfounded impact on feelings of security and, in turn, risk tolerance. Substantively, we provide guidance to managers whose marketing strategies target small segments with products that involve risk or potential harm, suggesting that activating a sense of shared fate in the segment might improve consumer reactions.