TY - JOUR
T1 - State of the art in benefit-risk analysis: Economics and marketing-finance
AU - Kalogeras, N.
AU - Odekerken-Schröder, G.J.
AU - Pennings, J.M.E.
AU - Gunnlaugsdottir, H.
AU - Holm, F.
AU - Leino, O.
AU - Luteijn, J.
AU - Magnusson, S.
AU - Pohjola, M.
AU - Tijhuis, M.J.
AU - Tuomisto, J.
AU - Ueland, O.
AU - White, B.
AU - Verhagen, H.
PY - 2012/1/1
Y1 - 2012/1/1
N2 - All market participants (e.g., investors, producers, consumers) accept a certain level of risk as necessary to achieve certain benefits. There are many types of risk including price, production, financial, institutional, and individual human risks. All these risks should be effectively managed in order to derive the utmost of benefits and avoid disruption and/or catastrophic economic consequences for the food industry. The identification, analysis, determination, and understanding of the benefit-risk trade-offs of market participants in the food markets may help policy makers, financial analysts and marketers to make well-informed and effective corporate investment strategies in order to deal with highly uncertain and risky situations.In this paper, we discuss the role that benefits and risks play in the formation of the decision-making process of market-participants, who are engaged in the upstream and downstream stages of the food supply chain. In addition, we review the most common approaches (expected utility model and psychometrics) for measuring benefit-risk trade-offs in the economics and marketing-finance literature, and different factors that may affect the economic behaviour in the light of benefit-risk analyses.Building on the findings of our review, we introduce a conceptual framework to study the benefit-risk behaviour of market participants. Specifically, we suggest the decoupling of benefits and risks into the separate components of utilitarian benefits, hedonic benefits, and risk attitude and risk perception, respectively. Predicting and explaining how market participants in the food industry form their overall attitude in light of benefit-risk trade-offs may be critical for policy-makers and managers who need to understand the drivers of the economic behaviour of market participants with respect to production, marketing and consumption of food products.
AB - All market participants (e.g., investors, producers, consumers) accept a certain level of risk as necessary to achieve certain benefits. There are many types of risk including price, production, financial, institutional, and individual human risks. All these risks should be effectively managed in order to derive the utmost of benefits and avoid disruption and/or catastrophic economic consequences for the food industry. The identification, analysis, determination, and understanding of the benefit-risk trade-offs of market participants in the food markets may help policy makers, financial analysts and marketers to make well-informed and effective corporate investment strategies in order to deal with highly uncertain and risky situations.In this paper, we discuss the role that benefits and risks play in the formation of the decision-making process of market-participants, who are engaged in the upstream and downstream stages of the food supply chain. In addition, we review the most common approaches (expected utility model and psychometrics) for measuring benefit-risk trade-offs in the economics and marketing-finance literature, and different factors that may affect the economic behaviour in the light of benefit-risk analyses.Building on the findings of our review, we introduce a conceptual framework to study the benefit-risk behaviour of market participants. Specifically, we suggest the decoupling of benefits and risks into the separate components of utilitarian benefits, hedonic benefits, and risk attitude and risk perception, respectively. Predicting and explaining how market participants in the food industry form their overall attitude in light of benefit-risk trade-offs may be critical for policy-makers and managers who need to understand the drivers of the economic behaviour of market participants with respect to production, marketing and consumption of food products.
KW - Benefit-risk trade-offs
KW - Decoupling
KW - Utility
KW - Economics
KW - Marketing-Finance
KW - PERCEIVED RISK
KW - UTILITY-FUNCTIONS
KW - EXPECTED UTILITY
KW - EMPIRICAL-TEST
KW - PRODUCT QUALITY
KW - CONSUMER CHOICE
KW - ATTITUDES
KW - FARMERS
KW - MODEL
KW - AVERSION
U2 - 10.1016/j.fct.2011.07.066
DO - 10.1016/j.fct.2011.07.066
M3 - (Systematic) Review article
C2 - 21871522
SN - 0278-6915
VL - 50
SP - 56
EP - 66
JO - Food and Chemical Toxicology
JF - Food and Chemical Toxicology
IS - 1
ER -