The Role of Risk in Consumer Behavior: A comprehensive and operational theory of risk taking in consumer behavior

Abstract

R AYMOND Bauer first formally proposed that consumer behavior be viewed as risk taking in 1960.1 Over a dozen years have passed since that proposal was made, and during that period a substantial body of research has been conducted and published. However, most of this research has examined relatively narrow aspects of risk taking and has been conducted without a broader, comprehensive theoretical structure. This lack of a comprehensive theory of risk taking seems to have worked to obscure the emerging picture of risk as the pivotal element in consumer behavior. Further, once perceived risk has been identified in a purchase situation, there seems to be some reasonable evidence that subsequent consumer behavior can be determined in accordance with such risk. If this view is correct, marketing managers may now have the opportunity to use the various elements of the marketing mix with considerably greater precision than has been possible in the past. This article attempts to construct a comprehensive theory of risk taking in consumer behavior by specifying the principal concepts involved and the interrelationships between the concepts. In addition, some of the research relevant to these concepts and interrelationships is presented. Finally, the author suggests how the theory might be tested and put to work in marketing decisions. The concept of theory used here is in the spirit of Baumol when he says: