Risk profile and consumer shopping behavior in electronic and traditional channels

Alok Gupta, Bo Chiuan Su, Zhiping Walter

Research output: Contribution to journalArticle

84 Scopus citations

Abstract

This paper develops an economic model that captures consumer shopping channel choices based on shopping channel characteristics and consumer risk profiles - risk-neutral or risk-averse. Analyses of results show that after making purchases through one channel, electronic or traditional, risk-averse consumers tend to be more loyal customers than risk-neutral consumers. Further, the two types of consumers may exhibit split channel behavior - risk-neutral consumers prefer one channel and risk-averse consumers prefer the other. However, risk-neutral consumers are not always more likely to prefer electronic channel than risk-averse consumers. Implications for retailer pricing strategies are discussed.

Original languageEnglish (US)
Pages (from-to)347-367
Number of pages21
JournalDecision Support Systems
Volume38
Issue number3
DOIs
StatePublished - Dec 2004

Keywords

  • Consumer risk profile
  • E-commerce
  • Online shopping behavior
  • Pricing
  • Retail channel switching

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