TY - JOUR
T1 - Hyteresis and Uncertainty
T2 - The Effect of Uncertainty on Delays to Exit Decisions
AU - Bragger, Jennifer Denicolis
AU - Bragger, Donald
AU - Hantula, Donald A.
AU - Kirnan, Jean
PY - 1998/6
Y1 - 1998/6
N2 - The effects of feedback variability and the availability of information on exit decisions in a nonprofitable venture were investigated in a computer simulated marketing scenario. Half of subjects received feedback relatively low in variability and half of subjects received feedback substantially higher in variability. Half of subjects in each variability condition had the opportunity to purchase additional information regarding their investment. Subjects receiving feedback higher in variability delayed exit decisions longer, invested more often, and invested more resources than subjects receiving feedback lower in variability. Subjects with no opportunity to purchase information delayed exit decisions longer, invested more often, and invested more resources than subjects with the opportunity to purchase information. The results are consistent with Dixit's (1992) theory of uncertainty and hysteresis and indicate that an uncertain environment can affect whether a decision maker continues to invest when costs are higher than profits.
AB - The effects of feedback variability and the availability of information on exit decisions in a nonprofitable venture were investigated in a computer simulated marketing scenario. Half of subjects received feedback relatively low in variability and half of subjects received feedback substantially higher in variability. Half of subjects in each variability condition had the opportunity to purchase additional information regarding their investment. Subjects receiving feedback higher in variability delayed exit decisions longer, invested more often, and invested more resources than subjects receiving feedback lower in variability. Subjects with no opportunity to purchase information delayed exit decisions longer, invested more often, and invested more resources than subjects with the opportunity to purchase information. The results are consistent with Dixit's (1992) theory of uncertainty and hysteresis and indicate that an uncertain environment can affect whether a decision maker continues to invest when costs are higher than profits.
UR - http://www.scopus.com/inward/record.url?scp=0001211421&partnerID=8YFLogxK
U2 - 10.1006/obhd.1998.2779
DO - 10.1006/obhd.1998.2779
M3 - Article
AN - SCOPUS:0001211421
SN - 0749-5978
VL - 74
SP - 229
EP - 253
JO - Organizational Behavior and Human Decision Processes
JF - Organizational Behavior and Human Decision Processes
IS - 3
ER -