The informational content of the shape of utility functions: Financial strategic behavior

Joost M.E. Pennings, Philip Garcia

Research output: Contribution to journalArticle

Abstract

Recently, Pennings and Smidts (2003) showed a relationship between organizational behavior and the global shape of the utility function. Their results suggest that the shape of the utility function may be related to 'higher-order' decisions. This research examines the relationship between financial strategic decisions and the global shape of the utility function of real decision makers. We assess the shape of utility functions of portfolio managers and show that the global shape is related to their strategic asset allocation. The findings demonstrate the informational content of the shape of utility functions in the context of financial strategic behavior.

Original languageEnglish (US)
Pages (from-to)83-90
Number of pages8
JournalManagerial and Decision Economics
Volume30
Issue number2
DOIs
StatePublished - Mar 1 2009

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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