Channel Contract Behavior: the Role of Risk Attitudes, Risk Perceptions, and Channel Member Market Structures

28 Pages Posted: 2 Aug 2014

See all articles by Joost M. E. Pennings

Joost M. E. Pennings

Maastricht University; Wageningen UR

Brian Wansink

Cornell University

Date Written: July 31, 2014

Abstract

By integrating elements of both marketing and finance, we show how risk influences channel contract behavior. We model risk behavior as the interaction between risk attitude and risk perception (IRAP). An analysis of the joint channel decisions of 208 producers, wholesalers, and processors provides three results. First, risk attitudes significantly vary across different levels of channel members. Second, IRAP – in combination with the channel member’s market structure on the buying and selling side – is a strong predictor of contract behavior. Third, increases in channel power strengthen the impact of IRAP on channel contract behavior.

Suggested Citation

Pennings, Joost M. E. and Wansink, Brian, Channel Contract Behavior: the Role of Risk Attitudes, Risk Perceptions, and Channel Member Market Structures (July 31, 2014). Journal of Business, Vol. 77, No. 4, 2004. Available at SSRN: https://ssrn.com/abstract=2474727

Joost M. E. Pennings

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Wageningen UR ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

Brian Wansink (Contact Author)

Cornell University ( email )

Ithaca, NY 14853
United States

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