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Choice reversal in management decisions: the seductive force of new information

Author

Listed:
  • Jörn Sebastian Basel

    (Kalaidos University of Applied Sciences)

  • Rolf Brühl

    (ESCP Europe Business School)

Abstract

The way in which objectively similar information is presented influences the direction of choice and decisions. Therefore, the sequential order in which information is presented to managers may have a relevant impact on how this information is perceived and evaluated. This study examines the consequences of information pursuit on judgment and decision making (JDM) in managerial decision making. In four experimental JDM-scenarios information pursuit was realised by a step-by-step approach with a time delay in which one group had the option of waiting for additional, non-instrumental information. Results indicate that the acquisition of new information, even if it is non-instrumental, leads to choice reversals (in one out of two scenarios) or to choice enhancement (in one out of two scenarios). In line with social psychology theories, we argue that the mental costs of information gathering lets participants believe that this information is more relevant than the already known facts. Our findings contribute to managerial JDM literature and indicate that cognitive dissonance and self-affirmation can significantly impact choices and decisions during information pursuit.

Suggested Citation

  • Jörn Sebastian Basel & Rolf Brühl, 2016. "Choice reversal in management decisions: the seductive force of new information," Journal of Business Economics, Springer, vol. 86(4), pages 343-359, May.
    • Handle: RePEc:spr:jbecon:v:86:y:2016:i:4:d:10.1007_s11573-015-0792-2
    DOI: 10.1007/s11573-015-0792-2
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Choice reversal; Experience; Information pursuit bias; Procedural invariance;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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