Effects of Portfolio Planning Methods on Decision Making: Experimental Results
International Journal of Research in Marketing, Vol. 11, pp. 73-84, 1994
12 Pages Posted: 11 Feb 2005 Last revised: 31 Dec 2011
Subjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects' likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment.
Keywords: Marketing, portfolio planning, managers, investment
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By Eric Waarts