Effects of portfolio planning methods on decision making: experimental results

Armstrong, J. Scott and Brodie, Roderick J. (1994): Effects of portfolio planning methods on decision making: experimental results. Published in: International Journal of Research in Marketing No. 11 (1994): pp. 73-84.

Abstract

Subjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects' likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment.

• Item Type: MPRA Paper
• Language: English
• Keywords: BCG matric, portfolio planning, marketing research
• Subjects: G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions

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