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A Bit(coin) of happiness after a failure: An empirical examination of the effectiveness of cryptocurrencies as an innovative recovery tool

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  • Nazifi, Amin
  • Murdy, Samantha
  • Marder, Ben
  • Gäthke, Jana
  • Shabani, Bardia

Abstract

This research provides the first examination of the effectiveness of cryptocurrencies as an innovative recovery tool. Through four experiments, we assess the effects of crypto-compensation against traditional compensation types (voucher/cash) on customer recovery satisfaction. Study 1 findings indicate that crypto-compensation is more effective than voucher and cash in improving customer recovery satisfaction. Further, it shows that consumer innovativeness moderates the effectiveness of crypto-compensation. After establishing the effectiveness of crypto-compensation, Study 2 finds a moderating effect of consumer choice in influencing crypto-compensation effectiveness. Study 3 reveals the differential effect of communicating different crypto-compensation benefits on customer recovery satisfaction. Finally, Study 4 concludes that familiar cryptocurrencies (e.g., Bitcoin vs. EOS) best restore satisfaction after a failure and that compensation message framing (i.e., cryptocurrency monetary value vs. real nominal value) moderates this relationship. Theoretical and practical implications are discussed.

Suggested Citation

  • Nazifi, Amin & Murdy, Samantha & Marder, Ben & Gäthke, Jana & Shabani, Bardia, 2021. "A Bit(coin) of happiness after a failure: An empirical examination of the effectiveness of cryptocurrencies as an innovative recovery tool," Journal of Business Research, Elsevier, vol. 124(C), pages 494-505.
    • Handle: RePEc:eee:jbrese:v:124:y:2021:i:c:p:494-505
    DOI: 10.1016/j.jbusres.2020.11.012
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    3. Gelbrich, Katja & Voigt, Sarah & Nazifi, Amin, 2023. "Remedy management for product recalls in the automotive industry: How car dealers should time the repair and communicate its outcome," Journal of Business Research, Elsevier, vol. 167(C).
    4. Chu, Meifen, 2021. "Bitcoin and traditional currencies during the Covid-19 pandemic period," MPRA Paper 110117, University Library of Munich, Germany.
    5. Jana, Rabin K. & Ghosh, Indranil & Wallin, Martin W., 2022. "Taming energy and electronic waste generation in bitcoin mining: Insights from Facebook prophet and deep neural network," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
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    7. Yongzhi Gong & Xiaofei Tang & En-Chung Chang, 2023. "Group norms and policy norms trigger different autonomous motivations for Chinese investors in cryptocurrency investment," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.

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