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The Anchoring Effect In The Context Of Strategic Investment Decision Making

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  • Andreas Stoller

Abstract

The anchoring effect is discussed in literature as one of the most robust and persistent bias that affects most decisions. Strategic investment decisions are non-routine, complex and uncertain and have a significant impact on the long-term performance. This paper seeks to explore the anchoring effect in the context of contextual factors and process dimensions of the strategic investment decision making by reviewing and analysing literature on anchoring effect and strategic investment decision making. This paper concludes that contextual factor “characteristics of decision makers” and process dimensions “procedural rationality” as well as “intuition” show robust conceptual interdependencies to the anchoring effect.

Suggested Citation

  • Andreas Stoller, 2022. "The Anchoring Effect In The Context Of Strategic Investment Decision Making," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 16(1), pages 210-220.
    • Handle: RePEc:isp:journl:v:16:y:2022:i:1:p:210-220
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    References listed on IDEAS

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    1. David Otley & Kim Soin, 2014. "Management Control and Uncertainty," Palgrave Macmillan Books, in: David Otley & Kim Soin (ed.), Management Control and Uncertainty, chapter 1, pages 1-13, Palgrave Macmillan.
    2. Elmassri, Moataz Moamen & Harris, Elaine Pamela & Carter, David Bernard, 2016. "Accounting for strategic investment decision-making under extreme uncertainty," The British Accounting Review, Elsevier, vol. 48(2), pages 151-168.
    3. Tor Brunzell & Eva Liljeblom & Mika Vaihekoski, 2013. "Determinants of capital budgeting methods and hurdle rates in Nordic firms," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(1), pages 85-110, March.
    4. Fadi Alkaraan, 2020. "Strategic investment decision-making practices in large manufacturing companies," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 28(4), pages 633-653, March.
    5. Kim Soin & Christian Huber & Sharon Wheatley, 2014. "Management Control and Uncertainty: Risk Management in Universities," Palgrave Macmillan Books, in: David Otley & Kim Soin (ed.), Management Control and Uncertainty, chapter 12, pages 178-192, Palgrave Macmillan.
    6. David Otley, 2014. "Management Control under Uncertainty: Thinking about Uncertainty," Palgrave Macmillan Books, in: David Otley & Kim Soin (ed.), Management Control and Uncertainty, chapter 6, pages 83-96, Palgrave Macmillan.
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    More about this item

    Keywords

    anchoring effect; strategic investment decision making; heuristic; bias; process dimension; contextual factor;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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