The anchoring effect in business intelligence supported decision-making

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Abstract

This article reports on a study that is part of a larger project on how Business intelligence (BI) can effectively support a range of decisions made by different decision-makers through the lens of behavioural economics. This study examines one cognitive bias, the anchoring effect. A laboratory experiment was conducted where participants used a BI system to make a forecast. Two anchors with the same value were presented; a spurious anchor and a plausible anchor. We were interested if the use of a BI system would mitigate the negative consequences of the anchoring effect. Our results show BI system use mitigates the effect of a spurious anchor, but not a plausible anchor. That is, despite the significant expenditure on BI, decision-makers can still be subject to major biases and make less rational decisions. This study indicates that cognitive bias is an important topic for BI supported decision makingresearch and practice.

Original languageEnglish
Pages (from-to)67-81
Number of pages15
JournalJournal of Decision Systems
Volume28
Issue number2
DOIs
Publication statusPublished - 23 May 2019

Keywords

  • anchoring effect
  • behavioral economics
  • Business intelligence
  • cognitive bias

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