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Goal-directed emotions nudge R%D investment decisions

Author

Listed:
  • Joon Kim
  • Hokyoung Ryu

Abstract

R%D investment is a risk-taking decision for innovations. However, a trade-off relationship exists between short-term profit and R%D expenditure (present vs. future), because of the uncertainty involved. Choosing to invest in R%D is thus seen as a risk-taking propensity of the decision-makers, and how to perceive the risk is susceptible of their cognitive system. This study included three empirical studies involving R%D investment situations. It looked at how goal-directed emotion worked for the decision-maker's risk-taking propensity, and how this motivated to construct her/his goal-directed efforts in R%D investment. Study 1 showed that the affect heuristic confirmed the decision-maker's risk-taking propensity, and the electrodermal activity (EDA) measure in Study 2 revealed that the affect heuristic contributed to the goal-directed emotion. The last experiment (Study 3) revealed how one's risk-taking propensity, motivated by the decision-maker's goal-directed emotion, modulated the goal-directed efforts. Finally, the implications and suggestions for the decision-makers with regard to the R%D investment were discussed.

Suggested Citation

  • Joon Kim & Hokyoung Ryu, 2021. "Goal-directed emotions nudge R%D investment decisions," International Journal of Management and Decision Making, Inderscience Enterprises Ltd, vol. 20(1), pages 29-57.
    • Handle: RePEc:ids:ijmdma:v:20:y:2021:i:1:p:29-57
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