Confounding changes in averages with marginal effects: How anchoring can destroy economic value in strategic investment assessments

• 成果类型: Article
• 署名作者: Shapira, Zur; Shaver, J. Myles
• 署名单位: New York University; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2165
• 发表日期: 2014
• 页码: 1414-1426
• 关键词: decision making; biases; investments; ROI; profit maximization

摘要

Profit maximization requires that decision makers assess marginal profits. We demonstrate that decision makers often confound marginal profits with changes in average profits (e.g., changes in return-on-investment). This results in systematic deviations from profit maximization where decision makers forgo profit-enhancing investments that reduce average profits or engage in loss-enhancing investments that decrease average losses. In other words, average profit becomes an anchor by which new investments are assessed. We conduct two decision-making experiments that show this bias and demonstrate it is pronounced when average profit data are accessible or task-relevant. Moreover, we find within-subject effects across experiments, which helps demonstrate the mechanism that invokes the bias. Copyright (c) 2013 John Wiley & Sons, Ltd.