Measuring the effect of risk attitude on marketing behavior. (29th January 2014)

• Record Type: Journal Article
• Authors: Franken, Jason R.V.; Pennings, Joost M.E.; Garcia, Philip
• Is Part Of: Agricultural economics. Volume 45:Number 5(2014:Sep.)
• Page Start: 525
• Page End: 535
• Publication Date: 2014-01-29
• Subjects: Agriculture -- Economic aspects -- Periodicals; 338.105
• DOI: 10.1111/agec.12104
• Languages: English
• ISSNs: 0169-5150

Abstract

<abstract abstract-type="main"> <title>Abstract</title> <p>Despite extensive study, researchers continue to search for consistent and reliable measures of risk preferences to explain market behavior. We find that a measure, combining experiments rooted in expected utility theory and measures derived from surveys, explains spot and contractual sales, but does not exhibit substantially greater explanatory power than its underlying components. Survey‐based measures are generally more significant indicators of marketing choices, but experimental measures reveal how risk attitudes vary over a range of probable outcomes, which is important in light of increased commodity price volatility. Given recently identified limitations on the applicability of expected utility theory, we suggest that researchers include survey methods to obtain low‐cost supplemental measures.</p> </abstract>