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Renz, Erich ; Müller, Marvin M. ; Böhm, Kim Leonardo

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.



Involved Institutions


Details

Item typeArticle
Journal or Publication TitleJournal of Business Economics
Publisher:Springer
Open Access Type:DEAL (Springer)
Volume:93
Page Range:pp. 1309-1354
Date13 March 2023
InstitutionsBusiness, Economics and Information Systems > Institut für Betriebswirtschaftslehre > Lehrstuhl für Innovations- und Technologiemanagement (Prof. Dr. Michael Dowling)
Identification Number
ValueType
10.1007/s11573-023-01139-7DOI
Classification
NotationType
C91 - D81 - D91 - M21 - O33Journal of Economics Literature Classification
KeywordsBehavioral experiment · Managerial decisions · Nudging · Risk aversion · Uncertainty aversion
Dewey Decimal Classification300 Social sciences > 330 Economics
StatusPublished
RefereedYes, this version has been refereed
Created at the University of RegensburgPartially
URN of the UB Regensburgurn:nbn:de:bvb:355-epub-540189
Item ID54018

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