Content area
Abstract
This study examines the impact of risk perceptions and preferences on the development of commitment with other channel members. The work on perceived risk by Knight (1921) and Bauer (1960) is integrated with the conceptual framework on channel relationships developed by Dwyer, Schurr, and Oh (1987) and the empirical work by Anderson and Weitz (1992). First, this project evaluates personal risk preference, business risk preference, tolerance of ambiguity, and sensation seeking as antecedents for making idiosyncratic investments in channel relationships. Next, the relationship between commitment to a business partner and perceptions about the probability of losing that partner were explored. Finally, an analysis of the cognitive process, either additive or multiplicative, for risk perceptions about channel relationships is explored.
The data for this project were collected with a mail survey of the National Food Brokers Association. Three waves of surveys were sent to key informants from each firm in this association.
The results of this project indicate that tolerance of ambiguity may be related to making idiosyncratic investments in a relationship. The level of idiosyncratic investment in a relationship was significantly related to the magnitude of loss if that relationship was terminated while the level of commitment to a relationship was inversely related to the perceived probability of losing that relationship. The hypothesized use of a multiplicative mental process for perceiving risk was not supported in this project.
Overall, this study suggests that personal characteristics may influence investments in channel relationships. This study also shows that risk perceptions are an important part of channel relationships.
