IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v38y2017i7p1003-1016.html
   My bibliography  Save this article

Consumer Risk‐reduction Behavior and New Product Purchases

Author

Listed:
  • Koichi Yonezawa
  • Timothy J. Richards

Abstract

Consumers purchase lower quantities of new products compared with those they have purchased in the past. We explain this observation as a result of risk‐averting behavior by utility‐maximizing consumers. If a new product involves a higher degree of risk that quality expectations will not be met compared with an incumbent product, we show that utility will be more concave for the new product. We test this prediction using a multiple‐discrete/continuous extreme value (MDCEV) model of demand. We show that utility is indeed more concave for new products relative to previously purchased products. Copyright © 2017 John Wiley & Sons, Ltd.

Suggested Citation

  • Koichi Yonezawa & Timothy J. Richards, 2017. "Consumer Risk‐reduction Behavior and New Product Purchases," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(7), pages 1003-1016, October.
    • Handle: RePEc:wly:mgtdec:v:38:y:2017:i:7:p:1003-1016
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bhat, Chandra R., 2018. "A new flexible multiple discrete–continuous extreme value (MDCEV) choice model," Transportation Research Part B: Methodological, Elsevier, vol. 110(C), pages 261-279.
    2. Shobhit Saxena & Abdul Rawoof Pinjari & Chandra R. Bhat & Aupal Mondal, 2024. "A flexible multiple discrete–continuous probit (MDCP) model: application to analysis of expenditure patterns of domestic tourists in India," Transportation, Springer, vol. 51(4), pages 1299-1326, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:38:y:2017:i:7:p:1003-1016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.