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Risky Decisions (risky + decision)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting75%

Selected Abstracts

The Impact of Affective Reactions on Risky Decision Making in Accounting Contexts

JOURNAL OF ACCOUNTING RESEARCH, Issue 5 2002
Kimberly Moreno
In this study we examine whether managers' affective reactions influence their risk,taking tendencies in capital budgeting decisions. Prior research on risky decision making indicates that decision makers are often risk averse when choosing among alternatives that yield potential gains, and risk taking when the alternatives yield losses. The results reported here indicate that negative or positive affective reactions can change this commonly found risky behavior. Managers were generally risk avoiding (taking) for gains (losses) in the absence of affective reactions, as predicted by prospect theory. However, when affect was present, they tended to reject investment alternatives that elicited negative affect and accept alternatives that elicited positive affect, resulting in risk taking (avoiding) in gain (loss) contexts. The results also indicate that affective reactions can influence managers to choose alternatives with lower economic value, suggesting that managers consider both financial data and affective reactions when evaluating the utility of a decision alternative. These findings point to the importance of considering affective reactions when attempting to understand and predict risky decision making in accounting contexts. [source]

The Decision of the Supply Chain Executive to Support or Impede Supply Chain Integration: A Multidisciplinary Behavioral Agency Perspective,

DECISION SCIENCES, Issue 4 2009
Verónica H. Villena
ABSTRACT Applying the behavioral agency model developed by Wiseman and Gomez-Mejia (1998), this article analyzes human resource factors that induce supply chain executives (SCEs) to make decisions that foster or hinder supply chain integration. We examine two internal sources (compensation and employment risk) and one external source (environmental volatility) of risk bearing that can make SCEs more reluctant to make the decision to promote supply chain integration. We argue and empirically confirm the notion that an employment and compensation system that increases SCE risk bearing reduces the SCE's willingness to make risky decisions and thus discourages supply chain integration. We also reveal that this negative relationship becomes stronger under conditions of high environmental volatility. In addressing the "so what?" question, we found empirical support for the hypothesis that supply chain integration positively influences operational performance. Even though this decision has a positive value for the firm, we showed that SCEs discourage supply chain integration when they face higher risk bearing. Hypotheses are tested using a combination of primary survey data and archival measures in a sample of 133 Spanish firms. [source]

I felt low and my purse feels light: depleting mood regulation attempts affect risk decision making

JOURNAL OF BEHAVIORAL DECISION MAKING, Issue 2 2009
Sabrina D. Bruyneel
Abstract We propose that negative affect can induce people to engage in risky decisions. We test two alternative hypotheses as to how this effect may emerge. The mood repair hypothesis states that risky choices in risk decision making serve as a means to repair one's negative affect. The depletion hypothesis, in contrast, states that risky choices in risk decision making are the mere consequence of a state of depletion resulting from engagement in active mood regulation attempts. The results of a first laboratory study establish a link between risky choices in risk decision making and negative affect. Subsequent experiments provide evidence that depletion due to active mood regulation attempts, rather than mood repair, is the underlying process for this link. Copyright © 2008 John Wiley & Sons, Ltd. [source]

Trait anger and anger expression style in children's risky decisions

AGGRESSIVE BEHAVIOR, Issue 1 2009
Elisa Gambetti
Abstract In this study, 104 children completed a task, measuring risk decision-making, and the State-Trait Anger Expression Inventory for Children and Adolescents . Subjects were also asked to evaluate the degree of danger, benefit, fun and fear perceived for each risky choice. Analyses indicated that (a) risk decision-making was predicted by both trait anger and outward expression of anger; (b) appraisal of danger fully mediated the relationship between trait anger and risk; (c) perceptions of benefit, scare and fun partially mediated the relationship between trait anger and risk; and (d) appraisal of danger partially mediated the relationship between outward expression of anger and risk decision-making. The results provide evidence for a relationship between dispositional anger and risk decision-making during childhood, suggesting a possible explanation of the mechanisms below. In particular, risk decision-making can be viewed as the output of cognitive and emotive processes, linked to dispositional anger that leads children to be amused, optimistic and fearless in potentially risky situations. These findings substantiate the importance of incorporating cognitive and emotive factors in theories that seek to explain the relationship between personality traits and risk decision-making across a broad age range. Aggr. Behav. 35:14,23, 2009. © 2008 Wiley-Liss, Inc. [source]