An exploratory study on consumption traps in Hong Kong: for MBA students (informed by perplexity.ai)
My question 1: "What is consumption trap all about with reference to the subject of consumer welfare in the context of Hong Kong?"
The reply: "The term "consumption trap" in relation to consumer welfare in Hong Kong refers to a situation where consumers fall into patterns of spending or consumption that may seem rewarding or normal but ultimately lead to negative outcomes such as financial loss, reduced consumer confidence, or being exploited, particularly in contexts like prepayment schemes, poor service quality, and tourist traps.
In the context of consumer welfare in Hong Kong, the consumption trap is linked to issues like the rise in consumer complaints related to quality of goods and services, unscrupulous sales practices, and prepayment consumption modes that have caused significant consumer detriment. These traps undermine consumer interests, harm the reputation of Hong Kong’s retail and tourism sectors, and affect consumers’ overall well-being. The Consumer Council in Hong Kong plays a key role in protecting consumer rights, monitoring trade practices, resolving disputes, and educating consumers about avoiding such traps.
Key points include:
Many complaints in Hong Kong relate to the quality of services and goods, such as food and entertainment services, electrical appliances, and tourism-related scams.
Prepayment schemes have also been identified as a significant consumption trap, with consumer complaints reaching large numbers due to loss incurred in these schemes.
Such traps damage consumer confidence and the economic reputation of Hong Kong as a trusted shopping and tourism destination.
The Consumer Council actively addresses these issues through complaint handling, advocacy, and proposals for regulatory measures to safeguard consumer welfare.
Thus, the consumption trap highlights the vulnerabilities consumers face in the consumption process in Hong Kong and underscores the need for effective consumer protection and awareness to enhance consumer welfare."
My question 2: "Highlight 6 main ideas underlying the topic of consumption trap?
The reply: "The six main ideas underlying the topic of the consumption trap, particularly in the context of consumer welfare, are:
Inefficient Coordination and Trapped Consumers: Consumers can get trapped in an inefficient equilibrium where they continue using or consuming a product even though it gives them negative utility because the alternative (not consuming it) is even worse. This coordination failure is a form of market trap where consumers feel compelled to consume despite adverse outcomes.
Consumption Spillovers and Externalities: The welfare effects of consumption often extend beyond the individual consumer to others, including non-consumers. Negative externalities arise when non-consumers derive negative utility from others' consumption (e.g., social exclusion), driving more people to consume the product to avoid that disutility.
Negative Non-Consumer Surplus: Traditional welfare measures overlook the negative impact on non-consumers, leading to an overestimation of overall consumer welfare. The product market trap appears when the negative welfare to non-users is significant.
Social and Psychological Forces: Social pressures such as the "fear of missing out" (FOMO) and status concerns can compel consumers to engage in consumption patterns that are not in their best interest, contributing to the trap.
Need for Regulatory Awareness: Because consumption traps can lead to negative consumer welfare and lock consumers into undesirable products or services, regulators should consider these traps in their assessment of market welfare and the need for intervention.
Product Market Traps as a Prisoner’s Dilemma: The consumption trap can be conceptualized as a Prisoner’s Dilemma where consumers would be better off collectively if they did not consume the product, but individually they continue consumption to avoid worse outcomes, perpetuating the trap.
These main ideas encapsulate the complex dynamics behind consumption traps and their implications for consumer welfare and market regulation."
My question 3: "What are the theories to study consumer trap from the consumer welfare perspective?"
The reply: "Theories to study the consumer trap from the consumer welfare perspective primarily revolve around the concept of consumption spillovers, coordination failures, and externalities affecting both consumers and non-consumers. Here are key theoretical approaches:
Consumption Spillovers and Externalities Theory: This theory highlights that consumption decisions produce spillover effects on non-consumers, causing negative welfare impacts beyond the individual consumer. Traditional welfare measures often miss these negative externalities, leading to an overestimation of consumer welfare.
Product Market Trap Theory: This theory describes situations where consumers are stuck in an inefficient equilibrium, continuing to consume a product despite deriving negative utility from it because not consuming would result in even worse welfare. It exemplifies a coordination failure where consumers collectively would be better off not consuming but individually have an incentive to consume.
Social Forces and Rationality Theory: Consumption traps can result from social pressures such as fear of missing out (FOMO) and status concerns, which compel consumers to use products even when rationally they might experience negative welfare outcomes. This theory recognizes that these social forces can operate even with fully rational consumers.
Prisoner’s Dilemma Framework: The consumption trap can be analyzed as a Prisoner’s Dilemma, where each consumer’s best action individually leads to a collectively worse outcome. Consumers are effectively prisoners trapped in decisions that reduce overall welfare.
Welfare Measurement Adjustments: New methodologies aim to measure consumer welfare by incorporating network effects and consumption spillovers, accounting for the welfare of both consumers and the negative impact on non-consumers to provide a more accurate assessment.
Behavioral Public Economics Perspective: This approach studies consumer welfare while incorporating behavioral insights such as cognitive biases, lack of self-control, and naivete that can exacerbate consumption traps, calling for policy interventions tailored to these behavioral aspects.
These theories together provide comprehensive tools to analyze how consumption traps arise, how they affect consumer welfare, and the implications for consumer protection and regulation."
My question 4: "What have been the research gaps and issues on this topic over the past 20 years?"
The reply: "The research gaps and issues on the topic of consumer trap and consumer welfare in Hong Kong over the past 20 years include the following:
Lack of Holistic, Integrated Studies: Existing research often looks at consumer behavior, management strategy, tourism effects, and real estate investments as fragmented subjects rather than in an integrated, interdisciplinary way. Holistic examinations of these linked dimensions are scarce.
Limited Longitudinal Data on Consumer Behavior: There is a shortage of long-term studies tracking how consumer behavior shifts over time, especially specific to Hong Kong's unique retail environment and consumption patterns.
Inadequate Exploration of Mall Management Evolution: Studies often miss how mall management adapts dynamically to market changes, competition, and consumer preferences, which is crucial for understanding consumption traps in retail contexts.
Insufficient Focus on Retail-Tourism Interactions: Since Hong Kong retail relies heavily on tourism, especially from mainland China, there is a dearth of integrated research combining tourism trends and retail consumer welfare dynamics.
Understudied Impact of Digital and Experiential Marketing: Though digital shopping and experiential retailing affect consumer choices and welfare, empirical research on their effectiveness in mitigating consumption traps and revitalizing retail is limited.
Socio-Cultural and Urban Planning Factors Overlooked: The role of retail spaces as social and community hubs and their urban integration is not well addressed, omitting important aspects that influence consumer welfare and consumption behavior.
Challenges in Measuring Consumer Welfare Accurately: Traditional consumer welfare measures often fail to capture negative externalities and social spillovers that characterize consumption traps, leading to gaps in policy guidance.
These gaps signal a strong need for long-term, interdisciplinary, and context-specific research examining the complex interactions between consumer behavior, market dynamics, management strategies, and regulatory frameworks in Hong Kong's consumption trap issues."
My question 5: "What have been the Hong Kong public-media-reported issues on this topic over the past 20 years?"
The reply: "Over the past 20 years, Hong Kong public-media-reported issues related to the consumption trap and consumer welfare include:
Rise of Digital and Mobile Consumption: Reports have highlighted that Hong Kong has become a highly digital and mobile-driven consumer market, with over 96% internet penetration and the use of multiple devices per person. This has driven massive growth in e-commerce spending, e-payment adoption, and online retail, shaping new consumption patterns but also raising concerns about consumer protection and potential traps in online transactions.
Consumer Complaints and Prepayment Scams: The media has reported numerous cases of consumer complaints, especially related to poor service quality, and prepayment consumption modes, which are linked to consumption traps where consumers lose money or get substandard goods/services. These issues have continued to surface in sectors such as food, entertainment, and tourism.
Social Media Influence and Advertising: With social media as a major channel for news and marketing, media reports pointed out the increasing role of digital marketing, targeted ads, and influencer promotions shaping consumer behavior, raising concerns about informed consumer choice and the risk of manipulation or impulse buying traps.
Strains on Press Freedom and Consumer Protection: Media freedom in Hong Kong has declined over the past two decades, limiting robust investigative reporting and independent consumer advocacy that are vital for exposing consumption traps and unfair trade practices.
Rising Consumer Expectation for Convenience: Media reports reflect that free shipping, customer reviews, and simple payment processes are top drivers of online shopping. While convenient, these features can sometimes encourage overconsumption without adequate consumer education on financial discipline or product quality.
Economic Shifts Impacting Consumption Patterns: Broader economic changes reported in the media, such as Hong Kong’s retail recovery challenges and influences from mainland Chinese tourists, affect consumption behavior and consumer welfare, with implications for the prevalence and nature of consumption traps.
These recurring public-media-reported themes demonstrate the complexity of consumption traps in Hong Kong's evolving digital and economic landscape, emphasizing the challenges to protecting consumer welfare effectively."
My question 6: "Propose 4 related research objectives and 2 related research issues on this topic for a part-time MBA dissertation project with a duration of 4 months. Also suggest 2 primary research methods and 1 secondary research method for this project based on pragmatism."
The reply: "For a part-time MBA dissertation project on the consumption trap and consumer welfare in Hong Kong with a 4-month duration, here are proposed research objectives, research issues, and research methods based on pragmatism:
Research Objectives
To analyze key factors driving the consumption trap among Hong Kong consumers, including social, economic, and digital influences.
To assess consumer awareness and attitudes towards consumer welfare protections and sustainable consumption in Hong Kong.
To evaluate the effectiveness of current regulatory and business practices in mitigating consumption traps in Hong Kong’s retail and digital marketplaces.
To explore consumer behavior changes during and after the COVID-19 pandemic related to consumption traps and welfare.
Research Issues
How do digital marketing and social media influence consumer susceptibility to consumption traps in Hong Kong?
What gaps exist in consumer protection policies and enforcement that allow consumption traps to persist?
Research Methods
Primary Research Methods:
Survey targeting a representative sample of Hong Kong consumers to gather quantitative data on consumption behavior, awareness, and attitudes.
In-depth Interviews with consumers, consumer protection officials, and retail managers for qualitative insights on consumption traps and welfare perceptions.
Secondary Research Method:
Document and Policy Analysis of existing consumer protection regulations, market reports, and previous studies on consumption traps and consumer welfare in Hong Kong.
These objectives, issues, and methods align with a pragmatic approach by combining quantitative and qualitative data to produce actionable insights for business and policy."
My question 7: "Comment on the originality, academic and practical values of this study. Also comment on the research ethics issues involved in this study."
The reply: "
Originality of the Study
This study on the consumption trap and consumer welfare in Hong Kong is original because it tackles an underexplored yet increasingly relevant issue amid the city's evolving retail, digital, and socio-economic landscape. It uniquely combines both behavioral and regulatory perspectives on consumption traps, especially in the context of Hong Kong’s specific consumer environment, characterized by high digital penetration, tourism influence, and dynamic market forces. The focus on practical welfare implications and the interaction between digital marketing, social pressures, and policy gaps adds substantial novelty compared to existing fragmented research on consumer behavior or protection alone.
Academic Value
Academically, the study offers a multidisciplinary contribution by linking consumer behavior theories, welfare economics, and public policy in a Hong Kong setting. It complements and extends current knowledge on social and economic externalities in consumption and fills a gap regarding measurement of consumer welfare in markets with prevalent consumption traps. The study will provide empirical evidence and theoretical insights useful for scholars in marketing, economics, and public policy, enriching literature on consumption spillover effects and consumer trap theory.
Practical Value
Practically, the study’s findings could inform policymakers, consumer protection agencies, and businesses about effective interventions to protect consumers and improve welfare outcomes. Insights on social media and digital marketing impacts can guide regulation and corporate strategies to mitigate negative consumption patterns. The focus on consumer perceptions can support consumer education campaigns. Particularly in Hong Kong’s fast-changing retail and online markets, the study could help design tools and frameworks to reduce consumer vulnerabilities and strengthen trust in the market.
Research Ethics Issues
Key research ethics considerations relate to:
Informed Consent: Ensuring all survey and interview participants are fully informed about the study purpose, data use, and their rights to withdraw.
Confidentiality and Anonymity: Protecting participants' identities and sensitive information, especially given potentially personal or financial details discussed.
Avoidance of Harm: Being mindful that discussions about consumer losses or financial stress may cause discomfort, researchers should provide support resources if needed.
Transparency and Integrity: Reporting findings honestly without bias, respecting participants’ perspectives, and avoiding any conflicts of interest.
Overall, strong adherence to ethical guidelines is needed to safeguard participant welfare and uphold research credibility in this consumer-focused study.
This assessment supports that the proposed dissertation project is intellectually valuable, practically relevant, original, and ethically sound."
My question 8: "Provide 6 non-academic and 6 academic references for this study in Harvard reference format."
The reply: "Here are six non-academic and six academic references in Harvard format related to the study on consumption trap and consumer welfare in Hong Kong:
Non-Academic References
KPay Group. (2025) 'Digital 2025 Hong Kong report reveals key consumer digital trends', KPay Group, 30 March. Available at: https://www.kpay-group.com/en-hk/blog/digital-2024-report?id=267 (Accessed: 27 August 2025).
Hong Kong Business. (2025) 'Press freedom in Hong Kong hits two-decade low: report', Hong Kong Business, 19 June. Available at: https://hongkongbusiness.hk/media-marketing/news/press-freedom-in-hong-kong-hits-two-decade-low-report (Accessed: 27 August 2025).
Meltwater. (2025) 'Social Media Statistics for Hong Kong [Updated 2025]', Meltwater, 24 June. Available at: https://www.meltwater.com/en/blog/social-media-statistics-hong-kong (Accessed: 27 August 2025).
Reuters Institute. (2024) 'Digital News Report (Hong Kong) 2024', Reuters Institute for the Study of Journalism. Available at: https://ccpos.com.cuhk.edu.hk/ReportHK2024.pdf (Accessed: 27 August 2025).
Hong Kong Free Press. (2025) 'HKFP Annual Report: Achievements, best coverage, & challenges 2024–5', Hong Kong Free Press, 7 March. Available at: https://hongkongfp.com/2025/03/08/hong-kong-free-press-annual-report-2024-5-our-achievements-best-coverage-accounts-from-the-past-year/ (Accessed: 27 August 2025).
Census and Statistics Department. (2025) 'Consumer Price Index Monthly Report July 2025', Census and Statistics Department of Hong Kong, 21 August. Available at: https://www.censtatd.gov.hk/en/scode270.html (Accessed: 27 August 2025).
Academic References
Bursztyn, L. et al. (2023) 'When Product Markets Become Collective Traps: The Case of Social Media', Journal of Economic Behavior & Organization. Available at: https://home.uchicago.edu/bursztyn/CollectiveTraps.pdf (Accessed: 27 August 2025).
Jimenez Durán, A. et al. (2023) 'When Product Markets Become Collective Traps: The Case of Social Networks', Toulouse School of Economics. Available at: https://www.tse-fr.eu/sites/default/files/TSE/documents/sem2023/eco_platforms/jimenez-duran.pdf (Accessed: 27 August 2025).
Consumer Council Hong Kong. (2024) 'Embracing Sustainable Consumption for a Happy Life', Hong Kong Consumer Council. Available at: https://www.consumer.org.hk/f/initiative_detail/308815/Embracing_Sustainable_Consumption_for_a_Happy_Life__A_Tracking_Study_on_Consumer_Behaviour.pdf (Accessed: 27 August 2025).
Ho, J. (2025) 'An exploratory study on consumption downgrade: for MBA dissertation', Personal Blog. Available at: http://josephho33.blogspot.com/2025/08/an-exploratory-study-on-consumption.html?m=1 (Accessed: 27 August 2025).
Hovenkamp, H. (2013) 'On The Meaning of Antitrust’s Consumer Welfare Standard', Journal of Competition Law & Economics, 9(3), pp. 421–455. Available at: https://www.networklawreview.org/herbert-hovenkamp-meaning-consumer-welfare/ (Accessed: 27 August 2025).
OECD. (2023) 'Consumer Welfare Standards: Advantages and Disadvantages Compared to Alternative Standards', OECD Publishing. Available at: https://www.oecd.org/content/dam/oecd/en/publications/reports/2023/05/consumer-welfare-standards-advantages-and-disadvantages-compared-to-alternative-standards_4de3277e/3d174fdf-en.pdf (Accessed: 27 August 2025).
These references provide a balanced mix of up-to-date empirical data, policy, theoretical frameworks, and current media context valuable for the study."
My question 9: "Could you suggest one more related research question that study what socially responsible marketing policies the Hong Kong retail enterprises should adopt in 2025?"
The reply: "A related research question could be:
"What socially responsible marketing policies should Hong Kong retail enterprises adopt in 2025 to effectively address consumption traps while promoting consumer welfare and sustainability?"
This question aligns with current sustainability trends and regulatory initiatives in Hong Kong, including waste reduction, eco-friendly retailing, and green finance."
A collection of blog notes on using chatgpt for research purpose.
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