title: State of the art in benefit-risk analysis: economics and marketing-finance.
abstract: 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.
authors.affiliation: Maastricht University, School of Business and Economics, P.O. Box 616, 6200 MD Maastricht, The Netherlands. N.Kalogeras@maastrichtuniversity.nl
authors.forename: N
authors.initials: N
authors.lastname: Kalogeras
authors.forename: G
authors.initials: G
authors.lastname: Odekerken-Schröder
authors.forename: J M E
authors.initials: JM
authors.lastname: Pennings
authors.forename: H
authors.initials: H
authors.lastname: Gunnlaugsdóttir
authors.forename: F
authors.initials: F
authors.lastname: Holm
authors.forename: O
authors.initials: O
authors.lastname: Leino
authors.forename: J M
authors.initials: JM
authors.lastname: Luteijn
authors.forename: S H
authors.initials: SH
authors.lastname: Magnússon
authors.forename: M V
authors.initials: MV
authors.lastname: Pohjola
authors.forename: M J
authors.initials: MJ
authors.lastname: Tijhuis
authors.forename: J T
authors.initials: JT
authors.lastname: Tuomisto
authors.forename: Ø
authors.initials: Ø
authors.lastname: Ueland
authors.forename: B C
authors.initials: BC
authors.lastname: White
authors.forename: H
authors.initials: H
authors.lastname: Verhagen
mesh_terms: D004467:Economics; D005062:European Union; D040541:Marketing; D018570:Risk Assessment