Goal-directed emotions nudge R&D investment decisions
by Joon Kim; Hokyoung Ryu
International Journal of Management and Decision Making (IJMDM), Vol. 20, No. 1, 2021

Abstract: R&D investment is a risk-taking decision for innovations. However, a trade-off relationship exists between short-term profit and R&D expenditure (present vs. future), because of the uncertainty involved. Choosing to invest in R&D is thus seen as a risk-taking propensity of the decision-makers, and how to perceive the risk is susceptible of their cognitive system. This study included three empirical studies involving R&D investment situations. It looked at how goal-directed emotion worked for the decision-maker's risk-taking propensity, and how this motivated to construct her/his goal-directed efforts in R&D investment. Study 1 showed that the affect heuristic confirmed the decision-maker's risk-taking propensity, and the electrodermal activity (EDA) measure in Study 2 revealed that the affect heuristic contributed to the goal-directed emotion. The last experiment (Study 3) revealed how one's risk-taking propensity, motivated by the decision-maker's goal-directed emotion, modulated the goal-directed efforts. Finally, the implications and suggestions for the decision-makers with regard to the R&D investment were discussed.

Online publication date: Tue, 12-Jan-2021

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