Experience is not Always an Asset on Decision-Making

Experience is not Always an Asset on Decision-Making

🔥NEW Most of us believe that we stay rational when deciding upon some news we received. However, Staats, KC and Gino (2018) argue that experience affects an individual's response to negative news, and thus influences decision-making.

The impact of experience on decision making when receiving bad news. Research findings

The researchers conducted a field study and two lab studies to understand how people update their beliefs when receiving bad news. Their main findings include:

• People change their views after hearing negative news.
• Experience determines the likelihood of an individual to change his/her mind about a decision made. To be specific, individuals who think they have more experience are less likely to change their mind than those who think they have less experience.
• Peer experience influences individuals' update on belief. Individuals surrounded by more experienced peers are more likely to stick to their previous decision - even confronted with bad news.
• Self and peer experience are substitutive in terms of the impact on decision-making. However, this substitutive relationship lessens significantly after receiving negative news.
• More experienced individuals discount negative news more quickly than less experienced individuals do.

Managerial Implications

• Managers and policy-makers should clearly communicate negative news to facilitate better decisions.
• Be prepared for challenges in persistence, starting from understanding where gaps in belief update may occur.
• Design a system for decision making, which has the information and tools for interpreting it in ways that enable the decision-makers to respond successfully. When designing such a system, the strengths and weaknesses of individual decision-makers should be considered.
• Understand how to address experienced individuals differently from those inexperienced. Managers probably need to educate experienced individuals about the risk of belief persistence and encourage them to understand how a less experienced person will interpret the situation by shifting their perspective. Managers might also share negative news more frequently with experienced people than they do with the inexperienced ones.
• Be aware that peer experience can influence individuals' decisions within an experienced group, and this should be factored into the decision-making system design.

Do you agree that experience is not always an asset on decision-making? Please share your thoughts with me.😃

Source: Staats, B., KC, D. and Gino, F., 2018. Maintaining Beliefs in the Face of Negative News: The Moderating Role of Experience. Management Science, 64(2), pp.804-824.

		Comments Sort by date Sort by rating Rating
		2 Jaap de Jonge Editor, Netherlands
	Reasons Why Experience is not Always an Asset on Decision-Making Thanks Chloe for sharing this research. To learn some more about the reasons why experience is somet... Sign up

		1 John Henry Project Manager, United States
	Learning from Experience Experience is an excellent teacher as long as you learn from it, and use it for gain. We all know so... Sign up

		2 Maurice Hogarth Consultant, United Kingdom
	Repetitive versus Cumulative Experience @John Henry:Agreed. Many people determine that their experience is an outcome of time spent doing s... Sign up

		2 Jaap de Jonge Editor, Netherlands
	A Learning Attitude Protects Us Against Misusing our Experience @John Henry: I agree that experience is normally valuable in decision making. Of course it is. As lo... Sign up

		2 John Henry Project Manager, United States
	The Importance of Experience, is Indeed, Learning from It If you use your experience as an excuse, you have missed the boat. Experience Gained, is actual the ... Sign up

		2 Sashi Rao Management Consultant, India
	Lateral Thinking and Out of Box Thinking Does Help I agree that experience does not always result in the best decisions. This is so because experience ... Sign up

		1 John Henry Project Manager, United States
	How Decision Makers Should be Informed Should seasoned decision makers really listen to inexperienced, green people in regard to decisions ... Sign up

		1 Paul Adlai Scavella Coach
	Experience Has its Pros and Cons Experience is necessary but has to be used appropriately. Experience can be a great asset to novices... Sign up

		2 John Prendergast Management Consultant, United Kingdom
	Building Confidence and a Learning Environment with Experience @Sashi Rao: I agree it is important to engage junior, new, members of a team as one day they'll take... Sign up

		1 Sreejith M Business Consultant, Netherlands
	Experience is and Should be Dynamic What we call 'experience' is by default a dynamic principle. So we need to acknowledge that whatever... Sign up

		1 Maurice Hogarth Consultant, United Kingdom
	The Experience for Group Think @Jaap de Jonge: Agreed. The danger of a successful experience, or a series of them, is that it can ... Sign up

		2 Titus Kituli HR Consultant, Tanzania
	Thin Line Between Experience and Decision Making Outcome In our national(Tanzania) language "Swahili" we have a saying; "Ukiona nyani mzee amekwepa mishale m... Sign up

		2 John Henry Project Manager, United States
	Experience is not Always Out of Date Experience is ongoing, it is always changing as the stimulus, the cause, the impact, is always chang... Sign up

		2 Maurice Hogarth Consultant, United Kingdom
	Experience is not Always Up to Date @John Henry: Agreed, although... Yes, the nature of the situations that we experience is always ong... Sign up

		0 John Henry Project Manager, United States
	Maurice- if you are in the First Camp, you are not Actually a Part of the Decision Making Group People who observe and learn from their own and others learned experience, adding the knowledge of t... Sign up