Behavioral models of managerial decision-making

This paper reviews the literature that applies behavioral economic models to managerial decisions. It organizes the literature into research that focuses on alternative utility functions and research that focuses on non-equilibrium models. Generally, behavioral models have seen less application to manager decisions than to consumer decisions and therefore there are many opportunities to develop new theoretical models, new laboratory experiments, and new field applications. The application of these models to field data is particularly underdeveloped. Mark Lett (2012) 23:405–421 DOI 10.1007/s11002-012-9183-4 A. Goldfarb (*) : A. Galasso : T. Hossain Rotman School of Management, University of Toronto, Toronto, ON, Canada e-mail: [email protected] T.-H. Ho :M. Hsu Haas School of Business, University of California, Berkeley, CA, USA W. Amaldoss Fuqua School of Business, Duke University, Durham, NC, USA A. L. Brown Department of Economics, Texas A&M University, College Station, TX, USA Y. Chen School of Information, University of Michigan, Ann Arbor, MI, USA T. H. Cui Carlson School of Management, University of Minnesota, Minneapolis, MN, USA N. Lim Wisconsin School of Business, University of Wisconsin-Madison, Madison, WI, USA M. Xiao Eller College of Management, University of Arizona, Tucson, AZ, USA B. Yang Marshall School of Business, University of Southern California, Los Angeles, CA, USA