Judgments of acceptable costs of hypothetical procurement offers as a function of success probability and profit: A vignette study
(English)In: Psicológica, ISSN 1576-8597Article in journal (Refereed) Submitted
This study treats procurement and judgment and decision-making using vignette scenarios in the perspective of the tenderer. It focuses on costs of creating a contract offer, risks of not winning a contract, possible profit following successful contract acceptance and the offering company’s’ size. The main hypothesis was that bidders deviate from classical economic theory. A second hypothesis was that judgments for bigger companies would allocate and accept greater maximum offer costs than smaller companies. The results showed that bidders deviated from classical EV-theory. They used a different multiplicative model for combining profit and probability, and there was no difference between responses for small and big companies. The factorial design revealed that subjective probability overestimated objective probability for low probability and underestimated greater probabilities. Finally participants were relatively more sensitive to changes in profit than to changes in probability.
Judgment, Procurement Offer, Probability, Profit, Chance
Research subject Psychology
IdentifiersURN: urn:nbn:se:su:diva-95512OAI: oai:DiVA.org:su-95512DiVA: diva2:660591