Effects of Portfolio Planning Methods on Decision Making: Experimental Results*

J. Armstrong and Roderick J. Brodie
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Roderick J. Brodie: Department of Marketing, University of Auckland,

General Economics and Teaching from University Library of Munich, Germany

Abstract: Subjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects' likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment.

Keywords: decision making; marketing; portfolio planning methods (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Pages: 12 pages
Date: 2004-12-06
New Economics Papers: this item is included in nep-acc, nep-cbe and nep-exp
Note: Type of Document - pdf; pages: 12
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Effects of portfolio planning methods on decision making: experimental results (1994)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpgt:0412016

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