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Predecisional Distortion of Information by Auditors and Salespersons

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Author Info

  • J. Edward Russo

    ()
    (Johnson Graduate School of Management, Cornell University, Ithaca, New York 14853)

  • Margaret G. Meloy

    ()
    (Department of Marketing, Virginia Polytechnic Institute and State University, Blacksburg, Virginia 24061-0236)

  • T. Jeffrey Wilks

    ()
    (Johnson Graduate School of Management, Cornell University, Ithaca, New York 14853)

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    Abstract

    As people are deciding between two alternatives, they may distort new information to support whichever alternative is tentatively preferred. The presence of such predecisional distortion of information was tested in decisions made by two groups of professionals, auditors and salespersons. Both groups exhibited substantial distortion of information, with little reduction for professional decisions compared to nonprofessional ones. However, auditors' distortion was significantly smaller than that of salespersons. In addition, holding professionals accountable for their decisions, akin to a supervisory review, lowered distortion somewhat for salespersons but not at all for auditors. The latter seemed to act as if they were always being held accountable. Because people seem unaware that they are distorting information, at least at the moment this bias is occurring, they are fully convinced of the soundness of their choices. This may make it difficult for distortion to be detected by decision makers themselves or even by supervisors who cannot completely duplicate their subordinate's knowledge.

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    File URL: http://dx.doi.org/10.1287/mnsc.46.1.13.15127
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 46 (2000)
    Issue (Month): 1 (January)
    Pages: 13-27

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    Handle: RePEc:inm:ormnsc:v:46:y:2000:i:1:p:13-27

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    Related research

    Keywords: Decision Making; Accountability; Bias in Judgments;

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    Cited by:
    1. Svenson, Ola, 2011. "Biased decisions concerning productivity increase options," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 440-445, June.
    2. Seth A. Miller & Michael L. DeKay & Eric R. Stone & Clare M. Sorenson, 2013. "Assessing the sensitivity of information distortion to four potential influences in studies of risky choice," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(6), pages 662-677, November.
    3. Russo, J.E. & Yong, Kevyn, 2011. "The distortion of information to support an emerging evaluation of risk," Journal of Econometrics, Elsevier, vol. 162(1), pages 132-139, May.
    4. Bond, Samuel D. & Carlson, Kurt A. & Meloy, Margaret G. & Russo, J. Edward & Tanner, Robin J., 2007. "Information distortion in the evaluation of a single option," Organizational Behavior and Human Decision Processes, Elsevier, vol. 102(2), pages 240-254, March.
    5. Meloy, Margaret G. & Russo, J. Edward, 2004. "Binary choice under instructions to select versus reject," Organizational Behavior and Human Decision Processes, Elsevier, vol. 93(2), pages 114-128, March.
    6. Peecher, Mark E. & Solomon, Ira & Trotman, Ken T., 2013. "An accountability framework for financial statement auditors and related research questions," Accounting, Organizations and Society, Elsevier, vol. 38(8), pages 596-620.
    7. DeKay, Michael L. & Patiño-Echeverri, Dalia & Fischbeck, Paul S., 2009. "Distortion of probability and outcome information in risky decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 109(1), pages 79-92, May.
    8. Phillips, Fred, 2002. "The distortion of criteria after decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(2), pages 769-784, July.
    9. Gold-Nöteberg, A.H. & Knechel, W.R. & Wallage, P., 2008. "The Effect of Audit Standards on Fraud Consultation and Auditor Judgment," ERIM Report Series Research in Management 11687, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
    10. Olga Kostopoulou & Christos Mousoulis & Brendan Delaney, 2009. "Information search and information distortion in the diagnosis of an ambiguous presentation," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(5), pages 408-418, August.
    11. Eyal Peer & Lidor Solomon, 2012. "Professionally biased: Misestimations of driving speed, journey time and time-savings among taxi and car drivers," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(2), pages 165-172, March.
    12. Carlson, Kurt A. & Pearo, Lisa Klein, 2004. "Limiting predecisional distortion by prior valuation of attribute components," Organizational Behavior and Human Decision Processes, Elsevier, vol. 94(1), pages 48-59, May.
    13. Joanna Ho & L. Keller & Pamela Keltyka, 2005. "How Do Information Ambiguity and Timing of Contextual Information Affect Managers’ Goal Congruence in Making Investment Decisions in Good Times vs. Bad Times?," Journal of Risk and Uncertainty, Springer, vol. 31(2), pages 163-186, September.

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