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When nudges promote neutral behavior: an experimental study of managerial decisions under risk and uncertainty
Renz, Erich
, Müller, Marvin M. and Böhm, Kim Leonardo
(2023)
When nudges promote neutral behavior: an experimental study of managerial decisions under risk and uncertainty.
Journal of Business Economics 93, pp. 1309-1354.
Date of publication of this fulltext: 06 Apr 2023 06:35
Article
DOI to cite this document: 10.5283/epub.54018
Abstract
Managers often make decisions in situations involving risk and uncertainty. To ensure the prosperity of the company, neutral behavior is desirable in such situations. However, when evaluating future-oriented managerial actions, cognitive biases can arise that are manifested as aversions towards risky and uncertain situations, leading to non-optimal decisions. In an online experiment with a ...
Managers often make decisions in situations involving risk and uncertainty. To ensure the prosperity of the company, neutral behavior is desirable in such situations. However, when evaluating future-oriented managerial actions, cognitive biases can arise that are manifested as aversions towards risky and uncertain situations, leading to non-optimal decisions. In an online experiment with a convenience sample of 298 US participants, we investigate deviations from risk- and uncertainty-neutral managerial decisions and apply neutrality-promoting behavioral interventions in a business venture setting. We find that using a recommendation nudge before as well as after making an initial decision improves individual performance to achieve higher neutrality levels. In sum, we show that in managerial decision-making processes, where experience, time, and information are often lacking, simple decision-making aids lead to better decisions.
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Details
| Item type | Article | ||||
| Journal or Publication Title | Journal of Business Economics | ||||
| Publisher: | Springer | ||||
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| Open Access Type: | DEAL (Springer) | ||||
| Volume: | 93 | ||||
| Page Range: | pp. 1309-1354 | ||||
| Date | 13 March 2023 | ||||
| Institutions | Business, Economics and Information Systems > Institut für Betriebswirtschaftslehre > Lehrstuhl für Innovations- und Technologiemanagement (Prof. Dr. Michael Dowling) | ||||
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| Classification |
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| Keywords | Behavioral experiment · Managerial decisions · Nudging · Risk aversion · Uncertainty aversion | ||||
| Dewey Decimal Classification | 300 Social sciences > 330 Economics | ||||
| Status | Published | ||||
| Refereed | Yes, this version has been refereed | ||||
| Created at the University of Regensburg | Partially | ||||
| URN of the UB Regensburg | urn:nbn:de:bvb:355-epub-540189 | ||||
| Item ID | 54018 |
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