| When some stakeholders have varied motivations, their behavior can depart widely from the predictions made by neoclassical economics, especially when the motives are not directly related to financial outcomes. To address behavior in light of varying goals, I integrate behavioral theory into a strategic management theory and answer the question of how varying goals affect the management of real options for decision makers. Using real options theory, I address the strategic environment that influences individual decision-makers and using goal setting theory, I address the behavioral aspects that influence these individuals' decisions within their environment.;There is a high degree of uncertainty associated with entrepreneurship and with the potential returns from investment in these firms, which suggests that real options theory is an appropriate approach for these types of investments. While there are many decisions related to a real options portfolio, I focus on only one, the option to abandon. This might be a particularly interesting decision for examining behavior in light of options because real options theory prescribes the benefits of holding an option in light of uncertainty but we know that individuals can be reluctant to change prior decisions (March & Shapira, 1987), which could mean that options are exercised instead of retained in certain situations.;The goals of this dissertation are to (1) contribute to real options theory by investigating whether or not real options constructs can be applied to individuals and the factors that influence these individuals especially beyond feedback about how a portfolio company is performing, (2) to contribute to research that calls for the explicit consideration of idiosyncratic differences in real options (O'Brien, Folta, Douglas & Johnson, 2003) in order to further refine real options theory and make it more applicable to micro-level lines of inquiry, and to (3) integrate behavioral theory and strategic theory by intersecting goals and real options. These goals also have practical aspects, in particular, firms and decision makers may benefit from understanding what factors are truly influential on their decisions and use this enhanced understanding to actually bring about the outcomes that they desire in a more systematic fashion. |
