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Predecisional Distortion of Information by Auditors and Salespersons

Author

Listed:
  • 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)

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.

Suggested Citation

  • J. Edward Russo & Margaret G. Meloy & T. Jeffrey Wilks, 2000. "Predecisional Distortion of Information by Auditors and Salespersons," Management Science, INFORMS, vol. 46(1), pages 13-27, January.
  • Handle: RePEc:inm:ormnsc:v:46:y:2000:i:1:p:13-27
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    File URL: http://dx.doi.org/10.1287/mnsc.46.1.13.15127
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    References listed on IDEAS

    as
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    Cited by:

    1. DeKay, Michael L. & Miller, Seth A. & Schley, Dan R. & Erford, Breann M., 2014. "Proleader and antitrailer information distortion and their effects on choice and postchoice memory," Organizational Behavior and Human Decision Processes, Elsevier, vol. 125(2), pages 134-150.
    2. Andersson, Patric, 2004. "Does experience matter in lending? A process-tracing study on experienced loan officers' and novices' decision behavior," Journal of Economic Psychology, Elsevier, vol. 25(4), pages 471-492, August.
    3. 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.
    4. 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.
    5. 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.
    6. Martine Nurek & Olga Kostopoulou & York Hagmayer, 2014. "Predecisional information distortion in physicians' diagnostic judgments: Strengthening a leading hypothesis or weakening its competitor?," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 9(6), pages 572-585, November.
    7. 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.
    8. 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.
    9. 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.
    10. Wiegerinck, V.J.J., 2006. "Consumer trust and food safety. An attributional approach to food safety incidents and channel response," Other publications TiSEM 6853c430-a9ce-434f-8d45-b, Tilburg University, School of Economics and Management.
    11. Kurt A. Carlson & Samuel D. Bond, 2006. "Improving Preference Assessment: Limiting the Effect of Context Through Pre-exposure to Attribute Levels," Management Science, INFORMS, vol. 52(3), pages 410-421, March.
    12. 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 University Rotterdam.
    13. 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.
    14. 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.
    15. Brian Rubineau & Yoon Kang, 2012. "Bias in White: A Longitudinal Natural Experiment Measuring Changes in Discrimination," Management Science, INFORMS, vol. 58(4), pages 660-677, April.
    16. 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.
    17. 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.
    18. Svenson, Ola, 2011. "Biased decisions concerning productivity increase options," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 440-445, June.
    19. Phillips, Fred, 2002. "The distortion of criteria after decision-making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(2), pages 769-784, July.

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