The Shape of Utility Functions and Organizational Behavior
Based on measurements with 332 owner-managers, the global shape of the utility function (i.e., S-shaped versus concave or convex over the total range of outcomes) appears to discriminate organizational behavior. Whereas the degree of risk aversion, based on the local shape of the utility function, may be important in explaining owner-manager's trading behavior, the global shape of the utility function appears to drive more structural organizational behavior.
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|Erasmus Research Institute of Management|
|ERIM Report Series Research in Management|
|Organisation||Erasmus Research Institute of Management|
Pennings, J.M.E, & Smidts, A. (2002). The Shape of Utility Functions and Organizational Behavior (No. ERS-2002-18-MKT). ERIM Report Series Research in Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/173