Fiolet, J-C; Haas, C and Hipel, K (2016) Risk-chasing behaviour in on-site construction decisions. Construction Management and Economics, 34(12), pp. 845-858. ISSN 0144-6193
Abstract
Risk-chasing behaviour in on-site construction decision-making can result in illogical decisions and, thus, significant project losses. Accordingly, the authors conducted a set of experiments in order to detect the existence of such behaviour under a range of typical project conditions within a set of common situations. Fifty-three project leaders participated in the experiments by making choices framed by a set of 24 questions. Each question related to a known behavioural tendency, included the influence of an external parameter, and contained information from which expected values could be derived. Participants were well distributed by geography, age and experience. Contrary to the common perception that construction decision-makers are relentlessly risk-averse, they demonstrated risk-chasing behaviour when the decision occurred in over-budget project conditions. Younger participants were even more risk chasing in such conditions. Understanding and identifying where such behaviour occurs could ultimately lead to the development of means of avoiding the resulting losses.; Risk-chasing behaviour in on-site construction decision-making can result in illogical decisions and, thus, significant project losses. Accordingly, the authors conducted a set of experiments in order to detect the existence of such behaviour under a range of typical project conditions within a set of common situations. Fifty-three project leaders participated in the experiments by making choices framed by a set of 24 questions. Each question related to a known behavioural tendency, included the influence of an external parameter, and contained information from which expected values could be derived. Participants were well distributed by geography, age and experience. Contrary to the common perception that construction decision-makers are relentlessly risk-averse, they demonstrated risk-chasing behaviour when the decision occurred in over-budget project conditions. Younger participants were even more risk chasing in such conditions. Understanding and identifying where such behaviour occurs could ultimately lead to the development of means of avoiding the resulting losses.;
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | behavioural economics; risk management; project management; decision-making; risk behaviour; decision making; construction |
| Index terms: | risk management, project management, behavioural economics, experiment, risk behaviour, decision-making, expected value |
| Subjects: | decision-making and reasoning, project management theory and practice, decision analysis, economic models, statistical analysis, data collection methods, risk assessment |
| Topics: | Risk Management, Project Management, Research Practice |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here