The Effects of Risk Aversion and Uncertainty Avoidance on Information Search and Brand Preference: Evidence from the Chinese Dairy Market

Abstract

ABSTRACT For decades, research and practice have recognized the significant effects of risk aversion and uncertainty avoidance on consumer behavior. These two concepts are often used interchangeably and studied as an integrated factor in marketing literature. Despite the relationship between risk aversion and uncertainty avoidance, it is necessary to differentiate between the two concepts to address the inaccuracy in definition and application. This research investigates Chinese dairy consumers who experienced one of the most significant food safety crises in recent years. Based on a structural equation modeling analysis, this study reveals that risk aversion and uncertainty avoidance have different effects on consumers’ information search, perceived quality and brand loyalty. Therefore, future research should recognize the different roles of risk aversion and uncertainty avoidance in consumer behavior. Practitioners should target risk-averse and uncertainty-avoiding consumers as distinct groups, based on different marketing communication campaigns.