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New product decision making: How chance and size of loss influence what marketing managers see and do
Author(s) -
Forlani David,
Mullins John W.,
Walker Orville C.
Publication year - 2002
Publication title -
psychology and marketing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.035
H-Index - 116
eISSN - 1520-6793
pISSN - 0742-6046
DOI - 10.1002/mar.10046
Subject(s) - operationalization , product (mathematics) , marketing , context (archaeology) , dimension (graph theory) , perception , investment (military) , prospect theory , decision maker , investment decisions , psychology , actuarial science , business , economics , microeconomics , behavioral economics , management science , paleontology , philosophy , geometry , mathematics , epistemology , neuroscience , politics , political science , pure mathematics , law , biology
This article empirically examines, in a new‐product decision context, the relationships among risk propensity, perceived risk, and risky choice decisions, when risk is operationalized as the chance of loss and the size of loss. The results indicate that perceptions of chance of loss directly influence choice among alternatives possessing different chances of loss and gain, whereas risk propensity directly influences choice among alternatives that differ in their size of loss and gain. The findings extend previous research by identifying dimension‐specific effects (a) between who the decision maker is and the size of an investment's potential loss, and (b) between what the decision maker sees and the chance that an investment will experience a loss. These results not only contribute to theory, but also provide marketing managers with guidance for their risky choice decisions. The composition of a new product's risk has implications for the decisions marketing managers make, for the placement of managers in risk‐sensitive positions, and for the presentation of information to individuals with oversight responsibility for the firm's product strategy decisions. © 2002 Wiley Periodicals, Inc.