Perceived Risk and Deliberation in Retailer Choice

With the rise of electronic commerce, traditional ways of distributing pharmaceuticals have been supplemented by online pharmacies. However, as the online environment offers further opportunities for fraudulent suppliers, there are also dangers associated with the purchase of drugs online (Arruñada 2004). For example, a consumer's health might be jeopardized by counterfeit medications bought online, or sensitive health-related information may be passed on illegally, resulting in adverse social or financial consequences to the individual. A recent report from the UN highlights the significance of the topic: The online distribution of pharmaceuticals is deemed to facilitate the circulation of dangerous drugs by undermining established control mechanisms (International Narcotics Control Board 2005). Threats to consumers are not restricted to dubious suppliers; even genuine online pharmacies suffer from severe deficiencies in, for example, the quality of the medical advice (Stiftung Warentest 2005). Research on consumer behavior towards online pharmacies is scarce. Büttner and Göritz (2005) found that perceived trustworthiness of an online pharmacy is a crucial factor effecting consumers' intention to buy as well as their actual risk-taking, and that perceived trustworthiness is related to the risk associated with buying medication online. However, a better understanding of how consumers handle these risks when interacting with online pharmacies would be valuable to both retailers and public policy makers. Studying consumer behavior towards online pharmacies can also contribute to research on e-commerce in general: As online pharmacies were legalized in Germany in January 2004-only a few months prior to the study-the effects of 2 various factors encountered in more mature markets, such as coexistence of new retailers and established brands or different levels of consumer experience, could be discounted. This enabled an in-depth investigation of the basic processes that underlie consumer choice of online retailers. For this, we drew on the risk-taking framework established by Bauer (1960). The notion of consumer behavior as risk-taking focuses on the understanding that consumer decisions can have adverse consequences, which may or may not occur (Bauer 1960; for an overview, see Mitchell 1999). The central concept is perceived risk-assumed to consist of a probability and a magnitude component. The probability component refers to the likelihood that a certain action (e.g., buying a product) will have negative consequences for the consumer, whereas the magnitude refers to the severity of those consequences (Dowling and Staelin 1994; Mitchell 1999). If a purchase is perceived as risky, consumers will employ strategies to reduce the …