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Risk perception in a simulated industrial purchasing task: The Effects of single versus multi‐play decisions
Author(s) -
Joag Shreekant G.,
Mowen John C.,
Gentry James W.
Publication year - 1990
Publication title -
journal of behavioral decision making
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.136
H-Index - 76
eISSN - 1099-0771
pISSN - 0894-3257
DOI - 10.1002/bdm.3960030203
Subject(s) - purchasing , perception , risk perception , task (project management) , contrast (vision) , multiplicative function , value (mathematics) , test (biology) , psychology , decision rule , computer science , marketing , economics , mathematics , business , artificial intelligence , machine learning , paleontology , management , neuroscience , mathematical analysis , biology
An experiment was conducted to test hypotheses concerning the impact of single‐play versus multiple‐play decisions made under risk in a simulated industrial purchasing setting. Results revealed that when a decision had multiple plays (e.g., purchase 100 personal computers), decision makers combined probabilities and outcomes to form their risk perceptions in a manner consistent with a multiplicative information integration model. In contrast, when a decision had a single trial (e.g., purchase one large mainframe computer), information was combined in a manner consistent with a non‐multiplicative integration pattern. In addition, when multiple trials of the decision occurred, subjects perceived lower risk than if the decision had a single play, even though the expected values of the decisions were the same. The results were discussed in terms of their relation to the use of expected value analysis as a decision‐making tool and in terms of their implications for industrial and consumer buying behavior.