Higher, Faster, Further: The Effect of Regulatory Focus and Social Influence on Overconfidence in Strategic Marketing Decisions

Trying to arrive at optimal decisions, firms increasingly value the opinion of decision teams rather than relying on a single person. A quasi-experimental study based on a market entry game, however, indicates that strategic marketing decisions based on dyads can be even more biased. More concretely, by combining regulatory focus theory and literature on social influence, the authors show that individuals having a high promotion focus tend to take abnormal risks and that this tendency is largely amplified if strategic marketing decisions are made jointly with a similar counterpart. Implications for group compositions and effective social decision making are derived.