 The default heuristic in strategic decision making: When is it optimal to choose the default without investing in information search?Journal of Business Research, 2014, vol. 67, issue 8, 1744-1748 Abstract: Many studies have shown that decision makers have a tendency to choose the default or standard action among several possible actions. The article develops a model to explore under what conditions it is optimal for a firm facing a strategic decision problem to choose the default action without investing in obtaining more information that allows a more accurate decision. The model shows that the strategy to follow the default without additional information (“the default heuristic”) is more likely to be optimal when the cost of obtaining information is higher, and when the variation in possible outcomes is lower. The model also analyzes the optimal level of information search, showing that if the firm chooses to obtain information at all, it will invest in more accurate information when the cost of obtaining information is lower and when the variation in possible outcomes is lower. Keywords: Heuristics and biases; Information search; Strategic decision making; Defaults; Default heuristic; Decision models (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:67:y:2014:i:8:p:1744-1748 DOI: 10.1016/j.jbusres.2014.02.021 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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