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When developing a new product, a buying firm solicits revenue sharing bids from two competing suppliers. Bidding behaviors of suppliers do not always align with predictions from rational agent models due to task uncertainty and bounded rationality, which could result in non-optimal supplier offers and ultimately hurt buying firm interests. This paper aims to discuss the aforementioned issues.

The authors built an analytical model that considers the impact of supplier technological risk, buyer–supplier coordination cost and supplier loss aversion on the optimal bid of the supplier. Next, using limited information processing capacity as a theoretic lens, the authors explore antecedents to the size of a focal supplier's bidding error, the absolute difference between the actual bid and the optimal bid. The authors used quantitative lab experimental data to test the hypotheses.

(1) Bounded rational bidders often fail to differentiate between relevant and irrelevant competitive information when placing bids, (2) loss aversion of a bidder significantly affects not only levels of bids, particularly for bidders with competitive disadvantages, but also sizes of the bidding error and (3) competitive information that has clearer performance implications are more influential in reducing sizes of bidding errors.

The results provide a comprehensive view of the bidding behaviors of a bounded rational supplier in an innovation outsourcing context with competition. With the results, managers now have a better understanding of behavioral influencers behind non-optimal supplier bids in an innovation outsourcing context.

The cognitive composition process of attribute information plays a critical role in heuristic aspects of consumers’ multiattribute preferential decisions. This study examines the effects of attribute information order and attribute information amount on consumers’ multiattribute preferential decisions under the premise of consumers’ limited information processing capacity. An experiment with two separate designs is conducted for testing the different hypotheses. The results support the hypothesis that consumers’ multiattribute preferential decisions are influenced by the amount of attribute information received/processed. The attribute information order is found to affect not only the outcomes of consumer decisions but also the amount of attribute information processed. These findings further suggest that consumers may be more inclined to adopt strategies of a noncompensatory heuristic nature when making multiattribute preferential decisions.

Often farmers do not switch to a new bank even if it offers better interest rates than the house bank. This can be attributed partly to transaction costs, and partly to bounded rationality. The purpose of this paper is to better understand farm borrowers by analyzing the role of incomplete information and limited cognitive abilities in their finance decisions.

The data for the analysis were retrieved from a written survey conducted among German farmers who were “experimentally” confronted with a funding problem and who had to make a choice between two loan offers: one from the housebank, and one from a competing bank. Using contingent valuation, each farmer's willingness to pay (WTP) for continuing business with his house bank was assessed.

Approximately 90 per cent of the farmers misjudged the absolute losses caused by higher interest rates. In the frame “accepted interest rate surcharge” the WTP for staying with the house bank was, on average, ten times higher than in the frame “accepted surcharge in Euro”. The misjudgment was found to differ depending on education, the duration of the business relationship, etc. The findings indicate that bounded rationality is a relevant determinant of the “reluctance to switch”.

Complementing research on the decision making of lenders, this paper studies the demand side of the agricultural credit market. Two research questions are examined which, to the authors' knowledge, have not previously been investigated through empirical surveys: first, to what extent do farmers make bounded‐rational financing decisions? Second, which factors explain bounded rationality?

This study aims to examine the roles of individual factors on risky investment intention as an indicator of risky financial behavior.

The data were collected from a survey instrument and composed of 496 individuals’ responses. The authors exploited structural equation modelling and multigroup structural equation modelling for direct and indirect effects, respectively.

Results indicate that emotional intelligence and locus of control have a positive impact on financial risk-taking, while risk aversion in general has the negative one. Although financial literacy does not have a direct effect on risky financial behavior, it has important role as a moderator variable, interacting with external locus of control.

The authors expect this study to contribute into behavioral finance literature in two ways. First, they investigate joint and relative effects of four major factors (i.e. emotional intelligence, locus of control, risk aversion in general and financial literacy) identified in the literature on financial risk-taking of individual investors. Each belongs to a different venue in an individual’s psyche and therefore is expected to influence financial risk-taking through different mechanisms. However, the research arguing their roles on the financial risky behavior directly is very limited. Investigating their individual effects is likely to provide unique insights into our understanding of risky financial behavior. Second, the authors also posit and manifest that the effects of the first three of the aforementioned factors on risk-taking intentions are moderated by financial literacy. This finding is likely to provide rather valuable insights pertaining to the emergence of risk-taking behaviors and may shed light on the root reasons behind equivocal findings in previous research regarding the effect of each factor.

This paper studies the accuracy of small‐ to medium‐sized (SME) managers' perceptions of their information exchanges with important market actors such as customers, competitors and suppliers. In this way, examines an important dimension of managers' network perceptions, which are assumed to be necessary for optimal utilisation of their networks. By comparing managers' perceived frequency of information exchanges with external actors with an “objective” tracking of their actual behaviour, reveals substantial perceptual errors. Findings are discussed and implications highlighted.

The purpose of this paper is to explore the role of four cognitive biases, namely, selective perception, exposure to limited alternatives, adjustment and anchoring, and illusion of control in anticipating and responding to Distributed-Denial-of-Service (DDoS) attacks.

The paper is based on exploratory case study research and secondary data on decision making in the Australian Bureau of Statistics (ABS) in regards to planning and managing DDoS attacks on Census day in 2016.

Cognitive biases limited the ABS’s awareness of the eCensus system’s vulnerabilities, preparation for and management of DDoS attacks. Cyberattacks are on the increase, and managers should expect and be prepared to deal with them.

Due to the sensitivity of the topic, it was not possible to interview relevant stakeholders. Analysis is based on high-quality secondary data that includes comprehensive government reports investigating the events on Census day.

Cyberattacks are inevitable and not an aberration. A checklist of actions is identified to help organisations avoid the failures revealed in the case study. Managers need to increase their awareness of cyberattacks, develop clear processes for dealing with them and increase the robustness of their decision-making processes relating to cybersecurity.

This the authors believe that it is the first major study of the DDoS attacks on the Australian census. DDoS is a security reality of the twenty-first century and this case study illustrates the significance of cognitive biases and their impact on developing effective decisions and conducting regular risk assessments in managing cyberattacks.

Across country and regional borders firms are faced with the question whether to address individual markets on a stand-alone basis or cooperatively. In order to support such strategic decisions, this paper aims to develop a decision framework accounting for the most relevant market dynamics affecting joint venture (JV) decisions, particularly in the truck industry. Moreover, the authors apply the framework to an expert Delphi and scenario approach to back a Western original equipment manufacturers (OEM’s) JV decision in the truck industry in Russia. Based on country-specific projections structured along the globally applicable decision framework, the authors serve executives’ individual information demand in an institutionally unique emerging market environment.

Online real-time expert Delphi study; scenario analysis; and expert workshops were used in this study.

Among other insights, the results predict hard times for Russian OEMs as they will likely face strong foreign competition, leading to decreased sales volumes and market shares. Although some experts doubt the survival of several Russian truck manufacturers, the Delphi sheds light on possible strategic responses, including consolidation, cooperation or focusing on new markets. Based on the Delphi results and an additional expert workshop, we draw multiple scenarios addressing, particularly, uncertain aspects of the industry’s development and their likely impact on the key stakeholder groups.

Although there are some studies following a similar methodological approach as that in this study (von der Gracht and Darkow, 2010; Gnatzy and Moser, 2012), the authors break new ground in developing a JV-dedicated decision framework and applying it to a special emerging market industry setup.

User-generated content (UGC), i.e. the feedback from consumers in the electronic market, including structured and unstructured types, has become increasingly important in improving online businesses. However, the ambiguity and heterogeneity, and even the conflict between the two types of UGC, require a better understanding from the perspective of human cognitive psychology. By using online feedback on hotel services, the purpose of this paper is to explore the effects of satisfaction level, opinion dispersion and cultural context background on the interrelationship between structured and unstructured UGC.

Natural language processing techniques – specifically, topic classification and sentiment analysis on the sentence level – are adopted to retrieve consumer sentiment polarity on five attributes relative to itemized ratings. Canonical correlation analyses are conducted to empirically validate the interplay between structured and unstructured UGC among different populations segmented by the mean-variance approach.

The variety of cognitions displayed by individuals affects the general significant interrelationship between structured and unstructured UGC. Extremely dissatisfied consumers or those with heterogeneous opinions tend to have a closer interconnection, and the interaction between valence and dispersion further strengthens or loosens the relationship. The satisfied or neutral consumers tend to show confounding sentiment signals in relation to the two different UGC. Chinese consumers behave differently from non-Chinese consumers, resulting in a relatively looser interplay.

By identifying consistent opinion providers and promoting more valuable UGC, UGC platforms can raise the quality of information generated. Hotels will then be able to enhance their services through the strategic use of UGC by analyzing reviews with dispersed low-itemized rating and by addressing the differences exhibited by non-Chinese customers. This analytical method can also help to create richly structured sentiment information from unstructured UGC.

This paper investigates the variety of cognitive behaviors in the process when UGC are contributed by online reviewers, focussing on the consistency between structured and unstructured UGC. The study helps researchers understanding emotion recognition and affective computing in social media analytics, which is achieved by exploring the variety of UGC information and its relationship to the contributors’ cognitions. The analytical framework adopted also improves the prior techniques.

Firms build new product development alliances to cope with the demands of continuous and rapid new product development. Such alliances allow surplus access to complementary capabilities and knowledge. However, the successful use of specialization advantages requires coordination and effective communication between alliance partners. Communication is vital to alliance success, as it allows a timely flow of information and resources across partners and supports the coordination within the alliance. The aim of this study is to research how divergent communication schemes influence firms’ new product development performance in alliances.

A paper-and-pencil survey about firms’ collaborative new product development performance in the German medical device industry was conducted. Results are derived from a survey of n = 184 new product development alliances in the medical device industry. To test the hypotheses, structural equation modeling (SEM) using the Mplus 7.0 software was applied.

The empirical results indicate that divergent communication schemes enhance product innovativeness and speed to market in new product development alliances. The development of new insights and solutions through joint sensemaking builds the theoretical fundament for the supportive effects of divergent communication schemes. Divergent communication schemes go hand in hand with ambiguity, that is, the source of joint dialogues and discussion through which alliance partners refine and adapt their different perspectives and interpretations. However, the supportive effect of divergent communication schemes on speed to market declines with increasing collaboration intensity.

The assessment of divergent communication schemes and new product development performance of the dyadic relationships in this survey is only based on one respondent. Furthermore, the study’s focus on a specific industry sector, albeit one fitting particularly well to the research question, may further limit the generalizability of the empirical findings. Future research should thus strive to take both firms of the dyadic relationship into account and moreover attempt to investigate mediating effects such as joint sensemaking or creativity.

The results indicate that alliance managers should become aware that different ways of communication are not per se dysfunctional. To achieve beneficial effects, they should enhance dialogues and constructive discussions through which the alliance partners develop novel insights and solutions on the fundament of occurring misunderstandings that root in divergent communication schemes. Regular meetings and conferences as well as inter-organizational teams should be applied because they stimulate joint dialogues and discussions in alliances. These instruments also enable learning processes and the development of trust that are both crucial for sensemaking processes in alliances.

Prior research has stressed the importance of interorganizational communication for the success of alliances. However, little is known about the effect of divergent communication schemes in alliances. This study shows theoretically and empirically that divergent communication schemes can improve new product development performance in alliances. The supportive effect of divergent communication schemes is contrary to the argumentation that communication problems and misinterpretations hamper alliance success.