| Common wisdom suggests that anticipating competitive behavior should improve the quality of strategic decisions, however little research has empirically investigated competitive anticipation. Role playing the competition, whereby managers make a choice as if they were the competition before making a choice for themselves, is one method often suggested as a prescriptive tool for improving managerial decision making. This dissertation examines the psychological mechanisms underlying the act of role playing and the consequences of such competitive anticipation on strategic choices. The effects of role playing are examined in several common managerial choice contexts, including choices between short-term vs. long-term benefits, choices concerning whether to continue or abort a failing course of action, and choices between options that vary in risk.; The results of six experiments, with over 1000 managers as respondents, show that role play systematically increases the tendency of managers to choose "safe" strategies that secure short-term benefits. Specifically, managers who role played were more likely to choose short-term strategies, continue investing in failing projects rather than adopt a new course of action, and avoid risky options. Building on prior research on loss aversion and the effects of role playing in several different managerial and nonmanagerial contexts, it is proposed that role play heightens the competitiveness associated with the decision, making managers more likely to prefer "bird in the hand" strategies that keep them ahead of the competition. That is, role play increases the tendency for managers to avoid uncertainty and prefer options that provide more immediate gains, while managers who do not role play tend to place greater weight on maximizing overall profits. Additional studies more closely examine the mechanisms underlying effects of role play. These studies support the heightened competitiveness explanation over competing alternative explanations. |
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