In consumer behavior, what role does the degree of perceived risk play?

The degree of perceived risk significantly influences how much effort and time consumers are willing to invest in seeking information before making a purchase decision. When consumers perceive a high level of risk associated with a product—whether that risk is financial, social, psychological, or physical—they are likely to engage in extensive research to mitigate that risk. This involves gathering information from various sources, evaluating alternatives, and seeking opinions from trusted sources.

In contrast, when perceived risk is low, consumers tend to rely more on heuristics or less extensive decision-making processes. This behavior stems from the need to feel assured that their choice will meet expectations and will not lead to negative outcomes. Thus, the greater the perceived risk, the more thorough the information search process becomes, demonstrating the critical connection between perceived risk and consumer behavior.