The Paradox of Customer Participation: The Role of Perceived Risk in Technology‐Based Innovation

ABSTRACT Technology‐based innovation is critical to new product development in today's rapidly advancing technological landscape. However, while customer participation (CP) is recognized as a key factor in driving successful innovation, the impact of varying levels of CP on consumer behavioral intentions, particularly within the context of technology‐based innovation, remains underexplored. This study examines how different levels of CP in the development process of innovative products influence the behavioral intentions of nonparticipating consumers. The findings from four experiments indicate that, at lower levels of CP, consumer behavioral intentions increase with higher levels of technology‐based innovation; however, this effect diminishes as CP increases. Specifically, perceived risk mediates this relationship, with the effect being more pronounced in higher‐complexity product categories and less so in lower‐complexity products, suggesting that product complexity acts as a boundary condition. This study extends existing research by identifying perceived risk as a key mechanism through which CP in technology‐based innovation shapes consumer behavioral intentions. Our findings offer both theoretical and practical implications for researchers and marketers.