IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v25y1979i3p251-263.html
   My bibliography  Save this article

Judgment Based Marketing Decision Models: An Experimental Investigation of the Decision Calculus Approach

Author

Listed:
  • Dipankar Chakravarti

    (University of Florida)

  • Andrew Mitchell

    (Carnegie-Mellon University)

  • Richard Staelin

    (Carnegie-Mellon University)

Abstract

Managerial judgment is frequently required to estimate many of the parameters of decision calculus models and the quality of these judgmental inputs may substantially affect model-based decisions. This paper suggests that if model builders are to rely upon managerial judgments in building models, research should be directed at understanding when managerial judgments will be valid and the types of biases that might be expected. A quasi-experimental design is used to explore managers' abilities to estimate the parameters of a decision-calculus model (ADBUDG) and to examine the value of this model in decision-making. The results are consistent with previous evidence of the existence of biases in human judgment. More specifically, they indicate that a manager's experience in a limited region of a nonlinear response function does not enable him to accurately predict decision outcomes or parameters in the unfamiliar regions and that model usage may, in certain situations, actually lead to poorer decisions.

Suggested Citation

  • Dipankar Chakravarti & Andrew Mitchell & Richard Staelin, 1979. "Judgment Based Marketing Decision Models: An Experimental Investigation of the Decision Calculus Approach," Management Science, INFORMS, vol. 25(3), pages 251-263, March.
    • Handle: RePEc:inm:ormnsc:v:25:y:1979:i:3:p:251-263
    DOI: 10.1287/mnsc.25.3.251
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.25.3.251
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.25.3.251?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ninko Kostovski & Marjan Bojadjiev & Hari Lokvenec, 2017. "Decision Support Systems For New Project Development In Fast Moving Consumer Goods Industries," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 4-14, October.
    2. Gelderman, M., 1995. "Factors affecting the success of management support systems: analysis and meta-analysis," Serie Research Memoranda 0020, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    3. Nadine Losch & Klaus Möller & Benjamin Quaiser & Sophie Bortfeldt, 2013. "Konzeption und Umsetzung einer Customer Lifetime Value-Berechnung am Beispiel der Luftfahrtindustrie," Schmalenbach Journal of Business Research, Springer, vol. 65(3), pages 274-301, May.
    4. van Bruggen, G.H. & Smidts, A. & Wierenga, B., 2000. "The Powerful Triangle of Marketing Data, Managerial Judgment, and Marketing Management Support Systems," ERIM Report Series Research in Management ERS-2000-33-MKT, 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 University Rotterdam.
    5. Lilien, G.L. & Rangaswamy, A. & Starke, K. & van Bruggen, G.H., 2001. "How and Why Decision Models Influence Marketing Resource Allocations," ERIM Report Series Research in Management ERS-2001-33-MKT, 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 University Rotterdam.
    6. Althuizen, N.A.P. & Wierenga, B., 2003. "The Effectiveness of Case-Based Reasoning: An Application in Sales Promotions," ERIM Report Series Research in Management ERS-2003-053-MKT, 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 University Rotterdam.
    7. Wierenga, Berend, 2011. "Managerial decision making in marketing: The next research frontier," International Journal of Research in Marketing, Elsevier, vol. 28(2), pages 89-101.
    8. Charles Abramson & Imran S. Currim & Rakesh Sarin, 2005. "An Experimental Investigation of the Impact of Information on Competitive Decision Making," Management Science, INFORMS, vol. 51(2), pages 195-207, February.
    9. J. S. Armstrong & R. Brodie & S. McIntyre, 2005. "Forecasting Methods for Marketing:* Review of Empirical Research," General Economics and Teaching 0502023, University Library of Munich, Germany.
    10. Gary L. Lilien & Arvind Rangaswamy & Gerrit H. Van Bruggen & Katrin Starke, 2004. "DSS Effectiveness in Marketing Resource Allocation Decisions: Reality vs. Perception," Information Systems Research, INFORMS, vol. 15(3), pages 216-235, September.
    11. Lilien, Gary L. & Rangaswamy, Arvind & van Bruggen, Gerrit H. & Wierenga, Berend, 2002. "Bridging the marketing theory-practice gap with marketing engineering," Journal of Business Research, Elsevier, vol. 55(2), pages 111-121, February.
    12. Darmon, Rene Y., 2002. "Salespeople's management of customer information: Impact on optimal territory and sales force sizes," European Journal of Operational Research, Elsevier, vol. 137(1), pages 162-176, February.
    13. Dong, Weimin & Swain, Scott D. & Berger, Paul D., 2007. "The role of channel quality in customer equity management," Journal of Business Research, Elsevier, vol. 60(12), pages 1243-1252, December.
    14. Parker, Philip M. & Sarvary, Miklos, 1997. "Formulating dynamic strategies using decision calculus," European Journal of Operational Research, Elsevier, vol. 98(3), pages 542-554, May.
    15. Berend Wierenga & Gerrit H. Van Bruggen & Richard Staelin, 1999. "The Success of Marketing Management Support Systems," Marketing Science, INFORMS, vol. 18(3), pages 196-207.
    16. Gerrit H. van Bruggen & Ale Smidts & Berend Wierenga, 1998. "Improving Decision Making by Means of a Marketing Decision Support System," Management Science, INFORMS, vol. 44(5), pages 645-658, May.
    17. Mafael, Alexander & Gottschalk, Sabrina A. & Kreis, Henning, 2016. "Examining Biased Assimilation of Brand-related Online Reviews," Journal of Interactive Marketing, Elsevier, vol. 36(C), pages 91-106.
    18. Wei-yu Kevin Chiang, 2012. "Supply Chain Dynamics and Channel Efficiency in Durable Product Pricing and Distribution," Manufacturing & Service Operations Management, INFORMS, vol. 14(2), pages 327-343, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:25:y:1979:i:3:p:251-263. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.