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dc.contributor.authorChi, Tailan
dc.contributor.authorFan, Dashan
dc.date.accessioned2013-04-15T17:35:41Z
dc.date.available2013-04-15T17:35:41Z
dc.date.issued1997
dc.identifier.citationChi, Tailan. (1997) Cognitive Limitations and 'Investment Myopia'. Decision Sciences, 28 (1), 27-57. http://dx.doi.org/10.1111/j.1540-5915.1997.tb01301.x
dc.identifier.urihttp://hdl.handle.net/1808/11012
dc.descriptionThis is the author's final draft. The publisher's official version is available electronically from: http://dx.doi.org/10.1111/j.1540-5915.1997.tb01301.x
dc.description.abstractOptimization of investment decisions in an uncertain and dynamically evolving environment is difficult due to the limitations of the decision maker’s cognitive capacity. Thus, actual investment decisions may deviate from the dynamically optimal decision rule. This paper investigates how a potential investment rule bias affects the expected payoff from a project that has an uncertain development time and an uncertain completion cost. The result shows that the presence of a potential bias in the adopted decision rule dissipates project value and that the dissipating effect is greater for a longer-term project if the completion cost is an increasing function of the time to completion.
dc.language.isoen
dc.publisherWiley
dc.subjectCognitive bias
dc.subjectInvestment Decision Making
dc.subjectProject management
dc.subjectStochastic models
dc.titleCognitive Limitations and Investment "Myopia"
dc.typeArticle
kusw.kuauthorChi, Tailan
kusw.kudepartmentSchool of Business
kusw.oastatusfullparticipation
dc.identifier.doi10.1111/j.1540-5915.1997.tb01301.x
kusw.oaversionScholarly/refereed, author accepted manuscript
kusw.oapolicyThis item meets KU Open Access policy criteria.
dc.rights.accessrightsopenAccess


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