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Fast and frugal heuristics for new product screening - is managerial judgment 'good enough?'

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  • Fatima M. Albar
  • Antonie J. Jetter

Abstract

Project screening in the fuzzy front-end of product development is dominantly based on managerial judgment, yet little is known about the quality of heuristic screening decisions. This research models three commonly discussed fast and frugal (F%F) heuristics for project screening (take-the-best, tallying and elimination-by-aspect) and explores their performance. An illustrative dataset of 52 new product development projects is used to compare the performance of F%F heuristics against that of regression models, which reflect compensatory judgment behaviour. The findings uncover a 'less is more' effect that justifies the use of simple heuristics in early stage product screening; two out of the three F%F heuristics reach accuracies of over 80% for project selection and 70% for project rejection and the best F%F model, tallying, performs similarly to the best regression model. The findings warrant a fresh look at managerial screening heuristics as 'good enough' decision making approach.

Suggested Citation

  • Fatima M. Albar & Antonie J. Jetter, 2013. "Fast and frugal heuristics for new product screening - is managerial judgment 'good enough?'," International Journal of Management and Decision Making, Inderscience Enterprises Ltd, vol. 12(2), pages 165-189.
    • Handle: RePEc:ids:ijmdma:v:12:y:2013:i:2:p:165-189
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    Cited by:

    1. Cucchiarini, Veronica & Scicchitano, Sergio & Viale, Riccardo, 2024. "The Entrepreneur's Cognitive and Behavioral Journey: Understanding Heuristics and Bias under Risk and Uncertainty," GLO Discussion Paper Series 1390, Global Labor Organization (GLO).
    2. Stingl, Verena & Geraldi, Joana, 2021. "A research agenda for studying project decision-behaviour through the lenses of simple heuristics," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    3. Sebastian Kruse & David Bendig & Malte Brettel, 2023. "How Does CEO Decision Style Influence Firm Performance? The Mediating Role of Speed and Innovativeness in New Product Development," Journal of Management Studies, Wiley Blackwell, vol. 60(5), pages 1205-1235, July.

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