Adjusting Risky Situations: A Theoretical Framework and Empirical Test

Donald A Wehrung, Kam-Hon Lee, David K. Tse and Ilan B. Vertinsky

Journal of Risk and Uncertainty, 1989, vol. 2, issue 2, 189-212

Abstract: Experienced executives frequently try to modify the risky situations they face in order to make them more favorable rather than simply choosing from among available decision options. This article investigates several types of risk adjustments such as trying to influence the situation through bargaining and spending resources, gathering information, developing new options, and consulting one's superiors. A theoretical framework is presented that characterizes different types of adjustments and relates them to variables such as perceived risk, perceived control, perceived responsibility, decisiveness, and risky choice. The framework is tested using experienced decisionmakers who respond to four simulated risky business decisions. Copyright 1989 by Kluwer Academic Publishers

Date: 1989
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