IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v64y2018i2p-804-824.html
   My bibliography  Save this article

Maintaining Beliefs in the Face of Negative News: The Moderating Role of Experience

Author

Listed:
  • Bradley R. Staats

    (Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599)

  • Diwas S. KC

    (Goizueta Business School, Emory University, Atlanta, Georgia 30322)

  • Francesca Gino

    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

Abstract

Many models in operations management involve dynamic decision making that assumes optimal updating in response to information revelation. However, behavioral theory suggests that rather than updating their beliefs, individuals may persevere in their prior beliefs. In particular, we examine how individuals’ prior experiences and the experiences of those around them alter their belief perseverance in operational decisions after the revelation of negative news. We draw on an exogenous announcement of negative news by the Food and Drug Administration and explore how it affects interventional cardiologists deciding between two types of cardiac stents. Analyzing 147,000 choices over six years, we find that individuals do respond to negative news by using the focal production tool less often. However, we find that both individuals’ own experiences and others’ experiences alter their responses. Moreover, although individual and other experience act as substitutes before negative news, we find that this substitution significantly curtails following the negative announcement. Finally, we find that experience leads doctors to discount negative news more rapidly over time. Two lab studies replicate our main findings and show that behavioral biases due to differences in perceptions of expertise drive the effect. Our research contributes not only to operations research but also to the practice of healthcare and operations.

Suggested Citation

  • Bradley R. Staats & Diwas S. KC & Francesca Gino, 2018. "Maintaining Beliefs in the Face of Negative News: The Moderating Role of Experience," Management Science, INFORMS, vol. 64(2), pages 804-824, February.
    • Handle: RePEc:inm:ormnsc:v:64:y:2018:i:2:p:-804-824
    DOI: 10.287/mnsc.2016.2640
    as

    Download full text from publisher

    File URL: https://doi.org/10.287/mnsc.2016.2640
    Download Restriction: no
    File URL: https://libkey.io/10.287/mnsc.2016.2640?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
    ---><---

    References listed on IDEAS

    as
    1. Karel H. van Donselaar & Vishal Gaur & Tom van Woensel & Rob A. C. M. Broekmeulen & Jan C. Fransoo, 2010. "Ordering Behavior in Retail Stores and Implications for Automated Replenishment," Management Science, INFORMS, vol. 56(5), pages 766-784, May.
    2. David M. Cutler & Robert S. Huckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," American Economic Review, American Economic Association, vol. 94(2), pages 342-346, May.
    3. Robert S. Huckman & Bradley R. Staats, 2011. "Fluid Tasks and Fluid Teams: The Impact of Diversity in Experience and Team Familiarity on Team Performance," Manufacturing & Service Operations Management, INFORMS, vol. 13(3), pages 310-328, July.
    4. Dennis Campbell & Frances Frei, 2011. "Market Heterogeneity and Local Capacity Decisions in Services," Manufacturing & Service Operations Management, INFORMS, vol. 13(1), pages 2-19, April.
    5. Gary E. Bolton & Axel Ockenfels & Ulrich W. Thonemann, 2012. "Managers and Students as Newsvendors," Management Science, INFORMS, vol. 58(12), pages 2225-2233, December.
    6. Pope, Devin G., 2009. "Reacting to rankings: Evidence from "America's Best Hospitals"," Journal of Health Economics, Elsevier, vol. 28(6), pages 1154-1165, December.
    7. Kenneth L. Schultz & Tobias Schoenherr & David Nembhard, 2010. "An Example and a Proposal Concerning the Correlation of Worker Processing Times in Parallel Tasks," Management Science, INFORMS, vol. 56(1), pages 176-191, January.
    8. I. J. Good, 1962. "How Rational Should a Manager be?," Management Science, INFORMS, vol. 8(4), pages 383-393, July.
    9. Mirko Kremer & Stefan Minner & Luk N. Van Wassenhove, 2010. "Do Random Errors Explain Newsvendor Behavior?," Manufacturing & Service Operations Management, INFORMS, vol. 12(4), pages 673-681, July.
    10. Diwas S. Kc & Christian Terwiesch, 2009. "Impact of Workload on Service Time and Patient Safety: An Econometric Analysis of Hospital Operations," Management Science, INFORMS, vol. 55(9), pages 1486-1498, September.
    11. Anupam Agrawal & Suresh Muthulingam, 2015. "Does Organizational Forgetting Affect Vendor Quality Performance? An Empirical Investigation," Manufacturing & Service Operations Management, INFORMS, vol. 17(3), pages 350-367, July.
    12. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    13. David Godes & Dina Mayzlin, 2004. "Using Online Conversations to Study Word-of-Mouth Communication," Marketing Science, INFORMS, vol. 23(4), pages 545-560, June.
    14. Bradley R. Staats & Francesca Gino, 2012. "Specialization and Variety in Repetitive Tasks: Evidence from a Japanese Bank," Management Science, INFORMS, vol. 58(6), pages 1141-1159, June.
    15. George W. Brown & John Y. Lu & Robert J. Wolfson, 1964. "Dynamic Modeling of Inventories Subject to Obsolescence," Management Science, INFORMS, vol. 11(1), pages 51-63, September.
    16. Rachel Croson & Karen Donohue, 2006. "Behavioral Causes of the Bullwhip Effect and the Observed Value of Inventory Information," Management Science, INFORMS, vol. 52(3), pages 323-336, March.
    17. Mirko Kremer & Brent Moritz & Enno Siemsen, 2011. "Demand Forecasting Behavior: System Neglect and Change Detection," Management Science, INFORMS, vol. 57(10), pages 1827-1843, October.
    18. Tom Fangyun Tan & Serguei Netessine, 2014. "When Does the Devil Make Work? An Empirical Study of the Impact of Workload on Worker Productivity," Management Science, INFORMS, vol. 60(6), pages 1574-1593, June.
    19. Marshall L. Fisher & Christopher D. Ittner, 1999. "The Impact of Product Variety on Automobile Assembly Operations: Empirical Evidence and Simulation Analysis," Management Science, INFORMS, vol. 45(6), pages 771-786, June.
    20. Anita L. Tucker, 2007. "An Empirical Study of System Improvement by Frontline Employees in Hospital Units," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 492-505, April.
    21. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    22. Rachna Shah & George P. Ball & Serguei Netessine, 2017. "Plant Operations and Product Recalls in the Automotive Industry: An Empirical Investigation," Management Science, INFORMS, vol. 63(8), pages 2439-2459, August.
    23. Anita L. Tucker, 2016. "The Impact of Workaround Difficulty on Frontline Employees’ Response to Operational Failures: A Laboratory Experiment on Medication Administration," Management Science, INFORMS, vol. 62(4), pages 1124-1144, April.
    24. Tat Y. Chan & Jia Li & Lamar Pierce, 2014. "Compensation and Peer Effects in Competing Sales Teams," Management Science, INFORMS, vol. 60(8), pages 1965-1984, August.
    25. Alessandro Arlotto & Stephen E. Chick & Noah Gans, 2014. "Optimal Hiring and Retention Policies for Heterogeneous Workers Who Learn," Management Science, INFORMS, vol. 60(1), pages 110-129, January.
    26. Yaniv, Ilan, 2004. "Receiving other people's advice: Influence and benefit," Organizational Behavior and Human Decision Processes, Elsevier, vol. 93(1), pages 1-13, January.
    27. Maurice E. Schweitzer & Gérard P. Cachon, 2000. "Decision Bias in the Newsvendor Problem with a Known Demand Distribution: Experimental Evidence," Management Science, INFORMS, vol. 46(3), pages 404-420, March.
    28. Sriram Thirumalai & Kingshuk K. Sinha, 2011. "Product Recalls in the Medical Device Industry: An Empirical Exploration of the Sources and Financial Consequences," Management Science, INFORMS, vol. 57(2), pages 376-392, February.
    29. Harvey, Nigel & Fischer, Ilan, 1997. "Taking Advice: Accepting Help, Improving Judgment, and Sharing Responsibility," Organizational Behavior and Human Decision Processes, Elsevier, vol. 70(2), pages 117-133, May.
    30. Robert S. Huckman & Bradley R. Staats & David M. Upton, 2009. "Team Familiarity, Role Experience, and Performance: Evidence from Indian Software Services," Management Science, INFORMS, vol. 55(1), pages 85-100, January.
    31. Edward D. Van Wesep, 2016. "The Quality of Expertise," Management Science, INFORMS, vol. 62(10), pages 2937-2951, October.
    32. Sriram Narayanan & Sridhar Balasubramanian & Jayashankar M. Swaminathan, 2009. "A Matter of Balance: Specialization, Task Variety, and Individual Learning in a Software Maintenance Environment," Management Science, INFORMS, vol. 55(11), pages 1861-1876, November.
    33. Andrew M. Davis & Elena Katok & Natalia Santamaría, 2014. "Push, Pull, or Both? A Behavioral Study of How the Allocation of Inventory Risk Affects Channel Efficiency," Management Science, INFORMS, vol. 60(11), pages 2666-2683, November.
    34. Hakold F. Smiddy & Lionel Naum, 1954. "Evolution of a "Science of Managing" in America," Management Science, INFORMS, vol. 1(1), pages 1-31, October.
    35. Hunt Allcott & Todd Rogers, 2014. "The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation," American Economic Review, American Economic Association, vol. 104(10), pages 3003-3037, October.
    36. Diwas KC & Bradley R. Staats & Francesca Gino, 2013. "Learning from My Success and from Others' Failure: Evidence from Minimally Invasive Cardiac Surgery," Management Science, INFORMS, vol. 59(11), pages 2435-2449, November.
    37. McKenzie, Craig R.M. & Liersch, Michael J. & Yaniv, Ilan, 2008. "Overconfidence in interval estimates: What does expertise buy you?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 107(2), pages 179-191, November.
    38. Bonaccio, Silvia & Dalal, Reeshad S., 2006. "Advice taking and decision-making: An integrative literature review, and implications for the organizational sciences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 101(2), pages 127-151, November.
    39. Arkes, Hal R. & Blumer, Catherine, 1985. "The psychology of sunk cost," Organizational Behavior and Human Decision Processes, Elsevier, vol. 35(1), pages 124-140, February.
    40. Whyte, Glen, 1993. "Escalating Commitment in Individual and Group Decision Making: A Prospect Theory Approach," Organizational Behavior and Human Decision Processes, Elsevier, vol. 54(3), pages 430-455, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Sleesman, Dustin J., 2019. "Pushing through the tension while stuck in the mud: Paradox mindset and escalation of commitment," Organizational Behavior and Human Decision Processes, Elsevier, vol. 155(C), pages 83-96.
    2. Diwas S. KC & Bradley R. Staats & Maryam Kouchaki & Francesca Gino, 2020. "Task Selection and Workload: A Focus on Completing Easy Tasks Hurts Performance," Management Science, INFORMS, vol. 66(10), pages 4397-4416, October.
    3. Tinglong Dai & Kelly Gleason & Chao‐Wei Hwang & Patricia Davidson, 2021. "Heart analytics: Analytical modeling of cardiovascular care," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(1), pages 30-43, February.
    4. Barrenho, Eliana & Miraldo, Marisa & Propper, Carol & Walsh, Brendan, 2021. "The importance of surgeons and their peers in adoption and diffusion of innovation: An observational study of laparoscopic colectomy adoption and diffusion in England," Social Science & Medicine, Elsevier, vol. 272(C).
    5. Tinglong Dai & Sridhar Tayur, 2020. "OM Forum—Healthcare Operations Management: A Snapshot of Emerging Research," Manufacturing & Service Operations Management, INFORMS, vol. 22(5), pages 869-887, September.
    6. Marshall Fisher & Marcelo Olivares & Bradley R. Staats, 2020. "Why Empirical Research Is Good for Operations Management, and What Is Good Empirical Operations Management?," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 170-178, January.
    7. Eliana Barrenho & Eric Gautier & Marisa Miraldo & Carol Propper & Christiern Rose, 2020. "Innovation Diffusion and Physician Networks: Keyhole Surgery for Cancer in the English NHS," Discussion Papers Series 638, School of Economics, University of Queensland, Australia.
    8. Katherine Bobroske & Michael Freeman & Lawrence Huan & Anita Cattrell & Stefan Scholtes, 2022. "Curbing the Opioid Epidemic at Its Root: The Effect of Provider Discordance After Opioid Initiation," Management Science, INFORMS, vol. 68(3), pages 2003-2015, March.
    9. Wu, Bingxiao & David, Guy, 2022. "Information, relative skill, and technology abandonment," Journal of Health Economics, Elsevier, vol. 83(C).
    10. Diwas Singh KC, 2020. "Heuristic Thinking in Patient Care," Management Science, INFORMS, vol. 66(6), pages 2545-2563, June.
    11. Philip DeCicca & Maripier Isabelle & Natalie Malak, 2024. "How do physicians respond to new medical research?," Health Economics, John Wiley & Sons, Ltd., vol. 33(10), pages 2206-2228, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diwas S. KC & Bradley R. Staats & Maryam Kouchaki & Francesca Gino, 2020. "Task Selection and Workload: A Focus on Completing Easy Tasks Hurts Performance," Management Science, INFORMS, vol. 66(10), pages 4397-4416, October.
    2. Maria R. Ibanez & Jonathan R. Clark & Robert S. Huckman & Bradley R. Staats, 2018. "Discretionary Task Ordering: Queue Management in Radiological Services," Management Science, INFORMS, vol. 64(9), pages 4389-4407, September.
    3. Tom F. Tan & Bradley R. Staats, 2020. "Behavioral Drivers of Routing Decisions: Evidence from Restaurant Table Assignment," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 1050-1070, April.
    4. Linda Argote & Sunkee Lee & Jisoo Park, 2021. "Organizational Learning Processes and Outcomes: Major Findings and Future Research Directions," Management Science, INFORMS, vol. 67(9), pages 5399-5429, September.
    5. Song-Hee Kim & Jordan Tong & Carol Peden, 2020. "Admission Control Biases in Hospital Unit Capacity Management: How Occupancy Information Hurdles and Decision Noise Impact Utilization," Management Science, INFORMS, vol. 66(11), pages 5151-5170, November.
    6. Bradley R. Staats & Francesca Gino, 2012. "Specialization and Variety in Repetitive Tasks: Evidence from a Japanese Bank," Management Science, INFORMS, vol. 58(6), pages 1141-1159, June.
    7. Yun Shin Lee & Enno Siemsen, 2017. "Task Decomposition and Newsvendor Decision Making," Management Science, INFORMS, vol. 63(10), pages 3226-3245, October.
    8. Tom Fangyun Tan & Serguei Netessine, 2019. "When You Work with a Superman, Will You Also Fly? An Empirical Study of the Impact of Coworkers on Performance," Management Science, INFORMS, vol. 65(8), pages 3495-3517, August.
    9. Zeynep Akşin & Sarang Deo & Jónas Oddur Jónasson & Kamalini Ramdas, 2021. "Learning from Many: Partner Exposure and Team Familiarity in Fluid Teams," Management Science, INFORMS, vol. 67(2), pages 854-874, February.
    10. Marshall Fisher & Marcelo Olivares & Bradley R. Staats, 2020. "Why Empirical Research Is Good for Operations Management, and What Is Good Empirical Operations Management?," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 170-178, January.
    11. Hailong Cui & Sampath Rajagopalan & Amy R. Ward, 2021. "Impact of Task-Level Worker Specialization, Workload, and Product Personalization on Consumer Returns," Manufacturing & Service Operations Management, INFORMS, vol. 23(2), pages 346-366, March.
    12. Diwas Singh KC & Bradley R. Staats, 2012. "Accumulating a Portfolio of Experience: The Effect of Focal and Related Experience on Surgeon Performance," Manufacturing & Service Operations Management, INFORMS, vol. 14(4), pages 618-633, October.
    13. Mirko Kremer & Francis de Véricourt, 2022. "Mismanaging diagnostic accuracy under congestion," ESMT Research Working Papers ESMT-22-01, ESMT European School of Management and Technology.
    14. Anna‐Lena Sachs & Michael Becker‐Peth & Stefan Minner & Ulrich W. Thonemann, 2022. "Empirical newsvendor biases: Are target service levels achieved effectively and efficiently?," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1839-1855, April.
    15. Shan Li & Kay-Yut Chen & Ying Rong, 2020. "The Behavioral Promise and Pitfalls in Compensating Store Managers," Management Science, INFORMS, vol. 66(10), pages 4899-4919, October.
    16. Karen Donohue & Özalp Özer, 2020. "Behavioral Operations: Past, Present, and Future," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 191-202, January.
    17. Kamalini Ramdas & Khaled Saleh & Steven Stern & Haiyan Liu, 2018. "Variety and Experience: Learning and Forgetting in the Use of Surgical Devices," Management Science, INFORMS, vol. 64(6), pages 2590-2608, June.
    18. Bradley R. Staats & Hengchen Dai & David Hofmann & Katherine L. Milkman, 2017. "Motivating Process Compliance Through Individual Electronic Monitoring: An Empirical Examination of Hand Hygiene in Healthcare," Management Science, INFORMS, vol. 63(5), pages 1563-1585, May.
    19. Rocio Bonet & Fabrizio Salvador, 2017. "When the Boss Is Away: Manager–Worker Separation and Worker Performance in a Multisite Software Maintenance Organization," Organization Science, INFORMS, vol. 28(2), pages 244-261, April.
    20. Masoud Kamalahmadi & Qiuping Yu & Yong-Pin Zhou, 2021. "Call to Duty: Just-in-Time Scheduling in a Restaurant Chain," Management Science, INFORMS, vol. 67(11), pages 6751-6781, November.

    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:64:y:2018:i:2:p:-804-824. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.