Risk perception in a simulated industrial purchasing task: The Effects of single versus multi‐play decisions

Shreekant G. Joag, John C. Mowen, James W. Gentry

Research output: Contribution to journalArticle

15 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)91-108
Number of pages18
JournalJournal of Behavioral Decision Making
Volume3
Issue number2
DOIs
StatePublished - Jan 1 1990

Keywords

  • Info rmation integration
  • Multiple play decisions
  • Ris k perception
  • Singl e play decisions

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Sociology and Political Science
  • Strategy and Management

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