Individual antecedents of real options appraisal: The role of national culture and ambiguity

Tarik Driouchi; Lenos Trigeorgis; Raymond So

doi:10.1016/j.ejor.2020.03.015

Individual antecedents of real options appraisal: The role of national culture and ambiguity

Tarik Driouchi, Lenos Trigeorgis, Raymond So

Accounting & Financial Management

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6 Citations (Scopus)

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Abstract

This paper studies the antecedents of cognitive options appraisal in a cross-cultural sample of specialists and generalists. Examining the role of national culture and ambiguity in the real option logic, we show that individuals have more propensity to intuitively value options opportunities using ambiguity-based approaches than standard Bayesian benchmarks, and identify the drivers behind such behavioral deviations. We find that knowledge and cultural factors, along with age, gender and international life experience, influence subjective real options values and ambiguity attitudes. Results also confirm the higher tolerance for uncertainty of the Chinese relative to others.

Original language	English
Pages (from-to)	1018-1032
Number of pages	15
Journal	EUROPEAN JOURNAL OF OPERATIONAL RESEARCH
Volume	286
Issue number	3
Early online date	14 Mar 2020
DOIs	https://doi.org/10.1016/j.ejor.2020.03.015
Publication status	Published - 1 Nov 2020

Keywords

Ambiguity
Choquet utility
Multiple-priors
National culture
Real options

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10.1016/j.ejor.2020.03.015

Individual antecedents of real_DRIOUCHI_Accepted6Mar2020_ePublished14Mar2020_GREEN AAM (CC BY-NC-ND)Accepted author manuscript, 1.23 MBLicence: CC BY-NC-ND

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AB - This paper studies the antecedents of cognitive options appraisal in a cross-cultural sample of specialists and generalists. Examining the role of national culture and ambiguity in the real option logic, we show that individuals have more propensity to intuitively value options opportunities using ambiguity-based approaches than standard Bayesian benchmarks, and identify the drivers behind such behavioral deviations. We find that knowledge and cultural factors, along with age, gender and international life experience, influence subjective real options values and ambiguity attitudes. Results also confirm the higher tolerance for uncertainty of the Chinese relative to others.

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Individual antecedents of real options appraisal: The role of national culture and ambiguity

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Keywords

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