A preliminary exploration of the effects of rational factors and behavioral biases on the managerial choice to invest in corporate responsibility

Tal Shavit, Avshalom M. Adam

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

We explore a possible decision-making process in which mixes of rational and non-rational factors affect the choice made by a firm's management to invest in corporate responsibility. We propose that the rational factors affecting the decision-makers' investment choice are: (a) moral choice; (b) risk management; (c) consequential changes that would be required in corporate structure or production processes; and (d) long-term versus short-term considerations. The non-rational behavioral biases that we suggest affecting the decision-makers' investment choice are: (a) attitude to risk, (b) status quo bias, (c) subjective discounting, and (d) myopic loss-aversion.

Original languageEnglish
Pages (from-to)205-213
Number of pages9
JournalManagerial and Decision Economics
Volume32
Issue number3
DOIs
StatePublished - Apr 2011
Externally publishedYes

Fingerprint

Dive into the research topics of 'A preliminary exploration of the effects of rational factors and behavioral biases on the managerial choice to invest in corporate responsibility'. Together they form a unique fingerprint.

Cite this