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

See all articles by J. Scott Armstrong

J. Scott Armstrong

University of Pennsylvania - Marketing Department

Roderick Brodie

University of Auckland Business School

Abstract

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

Suggested Citation

Armstrong, J. Scott and Brodie, Roderick, Effects of Portfolio Planning Methods on Decision Making: Experimental Results. International Journal of Research in Marketing, Vol. 11, pp. 73-84, 1994, Available at SSRN: https://ssrn.com/abstract=665393

J. Scott Armstrong (Contact Author)

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
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Philadelphia, PA 19104-6340
United States
215-898-5087 (Phone)
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HOME PAGE: http://marketing.wharton.upenn.edu/people/faculty/armstrong.cfm

Roderick Brodie

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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