Judgment and Decision Making in Project Continuation: A Study of Students as Surrogates for Experienced Managers

23 Pages Posted: 6 Jul 2004

See all articles by Janie Chang

Janie Chang

San Jose State University - Donald and Sally Lucas Graduate School of Business

Joanna L.Y. Ho

University of California, Irvine - Accounting Area

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Abstract

This work explores the efficacy of using students as surrogates for experienced managers in escalation studies. Participants were 222 managers with substantial project planning and evaluation experience and 146 undergraduate business students. Our results show that the experienced managers exhibited a strong tendency to continue projects, with this tendency being positively related to the degree of project completion. The managers also tended to invest a greater amount of additional resources in response to favorable rather than to unfavorable information, contingent on the degree of project completion. In contrast, the students' decisions showed little sensitivity to the contextual information, and they exhibited no association between the likelihood they would continue a project and how much funding they would allocate to the project. These results suggest that caution is needed in generalizing student-based escalation findings to real-world business settings.

Keywords: Decision making, management accounting, project evaluation, surrogacy

JEL Classification: C91, M40, M46, G31

Suggested Citation

Chang, Janie and Ho, Joanna L.Y., Judgment and Decision Making in Project Continuation: A Study of Students as Surrogates for Experienced Managers. Abacus, Vol. 40, pp. 94-116, February 2004. Available at SSRN: https://ssrn.com/abstract=541783

Janie Chang (Contact Author)

San Jose State University - Donald and Sally Lucas Graduate School of Business ( email )

One Washington Square
San Jose, CA 95192-0066
United States

Joanna L.Y. Ho

University of California, Irvine - Accounting Area ( email )

Irvine, CA 92697-3125
United States
949-824-4041 (Phone)
949-725-2833 (Fax)

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