Effects of Portfolio Planning Methods on Decision Making: Experimental Results
AbstractSubjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects' likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment.
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Bibliographic InfoPaper provided by EconWPA in its series General Economics and Teaching with number 0412016.
Length: 12 pages
Date of creation: 06 Dec 2004
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decision making; marketing; portfolio planning methods;
Find related papers by JEL classification:
- A - General Economics and Teaching
This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-12-12 (Accounting & Auditing)
- NEP-ALL-2004-12-12 (All new papers)
- NEP-CBE-2004-12-12 (Cognitive & Behavioural Economics)
- NEP-EXP-2004-12-12 (Experimental Economics)
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