The effect of mood and information sequence on third party evaluation of escalating capital investment projects

IF 4.2 2区管理学 Q1 BUSINESS, FINANCE

Management Accounting Research Pub Date : 2023-03-01 DOI:10.1016/j.mar.2022.100819

Chang-Yuan Loh , Mandy M. Cheng , Rodney Coyte

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引用次数: 0

Abstract

Third party evaluation of capital investment projects has been proposed as an effective means of controlling escalation of commitment. Prior research shows that such effectiveness can be limited by cognitive bias or task-related affective reactions but has not examined the influence of moods, known to impact how people process information, on third party evaluation of escalating capital investment. We argue that incidental moods (caused by factors unrelated to the decision context) can affect third party consultants’ evaluation of capital investment projects by influencing: (1) the consultants’ effort in processing project information; and (2) the consultants’ susceptibility to arrive at different decisions when presented with the same project information in different sequences. We conducted an experiment to test our propositions in an escalation of commitment context. We find that consultants in a negative mood spend more effort processing project information during the decision task than those in a positive mood. We also observe an interaction between mood and information presentation sequence, such that consultants in a positive mood are more likely to recommend project continuation when a project’s narrative information is viewed after numerical information rather than the reverse. In contrast, we observe no differences in project continuation recommendations for consultants in a negative mood irrespective of sequence. These results suggest that moods can influence the effectiveness of consultants as a control mechanism to prevent project escalation, and that organizations wishing to adopt a more conservative approach to preventing escalation of commitment should design project reports to present numerical information after narrative information.

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情绪和信息序列对升级资本投资项目第三方评价的影响

资本投资项目的第三方评估已被提议作为控制承诺升级的有效手段。先前的研究表明，这种有效性可能受到认知偏见或与任务相关的情感反应的限制，但尚未研究情绪对第三方评估不断升级的资本投资的影响，情绪会影响人们处理信息的方式。我们认为，偶然情绪（由与决策背景无关的因素引起）会影响第三方顾问对资本投资项目的评估，影响因素包括：（1）顾问在处理项目信息方面的努力；以及（2）当以不同的顺序提供相同的项目信息时，顾问容易做出不同的决定。我们进行了一项实验，在承诺升级的背景下检验我们的主张。我们发现，消极情绪的顾问在决策任务中花费的精力比积极情绪的顾问更多。我们还观察到情绪和信息呈现顺序之间的互动，因此，当项目的叙述信息是在数字信息之后而不是相反的信息之后查看时，情绪积极的顾问更有可能建议项目继续进行。相反，我们观察到，对于处于消极情绪的顾问，无论顺序如何，项目继续建议都没有差异。这些结果表明，情绪会影响顾问作为防止项目升级的控制机制的有效性，希望采取更保守的方法来防止承诺升级的组织应该设计项目报告，在叙述信息之后提供数字信息。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Management Accounting Research Multiple-

CiteScore

7.10

自引率

4.30%

发文量

期刊介绍： Management Accounting Research aims to serve as a vehicle for publishing original research in the field of management accounting. Its contributions include case studies, field work, and other empirical research, analytical modelling, scholarly papers, distinguished review articles, comments, and notes. It provides an international forum for the dissemination of research, with papers written by prestigious international authors discussing and analysing management accounting in many different parts of the world.