Risk and rationality

The influence of decision domain and perceived outcome control on managers' high‐risk decisions

Bibliographic Data

ID12166309
AuthorsDavid Forlani (University of Colorado Denver, corresponding author)
Year2002
Volume15
Issue2
Pages125-140
Publication date2002-03-18
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Behavioral Decision Making (JOURNAL)
Journal identifiersISSN: 0894-3257 • E-ISSN: 1099-0771
PublisherWiley (PUBLISHER • GB)
DOI10.1002/bdm.406
OpenAlexW2055327000
LanguageEN
Citations received3
References cited30

The issue of when managers will undertake different forms and amounts of risk in their new business creation decisions is still not fully understood. To address one facet of this issue, this paper advances the proposition that decision domain and perceived outcome control interact to impact managers' new‐product introduction decisions. Employing a causal method, a nested experimental design and indicators of risk's probability of loss and magnitude of loss elements, the study's results demonstrate that the manager's level of perceived outcome control combines with decision domain to determine subsequent levels of risk taking that are specific to each element of risk. Implications for theory, including prospect theory, and practice, especially firms wanting to pursue today's high‐risk new‐economy based initiatives, are discussed. Copyright © 2002 John Wiley & Sons, Ltd

Actuarial science · Business · Control (management · Decision theory · Domain (mathematical analysis · Economics · Facet (psychology · Management · Microeconomics · Outcome (game theory · Political science · Product (mathematics · Proposition · Prospect theory · Rationality · Risk analysis (engineering · Decision-Making and Behavioral Economics · Economic and Environmental Valuation · Experimental Behavioral Economics Studies · Psychology · Social Psychology · Marketing

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