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Patience Versus Decisiveness in Decision-Making

W. Bentley Macleod and Mark Pingle ()

No 07-004, Working Papers from University of Nevada, Reno, Department of Economics, University of Nevada, Reno , Department of Resource Economics

Abstract: When rationality is bounded, a variety of factors may influence how far a choice is from optimal. We examine the willingness to search among alternatives. We find fixed individual differences in this temperament measure. People may be usefully typed according to how they obtain improved choices. More patient subjects obtain improvement by effectively using decision resources, performing better when the decision is more complex. More decisive subjects obtain improvement by conserving valuable decision resources, performing better when the decision problem is simple. We find that a bonus incentive frame encourages patience, while a penalty frame encourages decisiveness. These results suggest an organization can enhance its performance by matching individual temperaments and incentive frames to decision tasks at hand.

Keywords: framing; deliberation cost; bounded rationality; heuristics; incentives (search for similar items in EconPapers)
JEL-codes: D01 D81 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe
Date: 2007-08
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