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A
dilemma between decision quality and confidence in the decision: experimental
validation of investment analysis methods.
Egon
Berghout, University of Groningen,
Faculty of Economic Sciences, Groningen, Germany.
e.w.berghout@eco.rug.nl
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ABSTRACT |
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The use of
investment analysis methods in IT investment appraisal is not as straightforward
as many researchers claim it to be. This article describes a series of
experiments performed to evaluate investment analysis methods. The results of
the experiments indicate that which particular method is used, has a significant
influence on the results of an evaluation. Furthermore, a dilemma between the
quality of the evaluation and level of confidence of the decision makers in the
established priorities was identified. In other words: the level of confidence
decreases with the quality of the priority list, and decision makers can be more
confident of a lower quality evaluation. The article, therefore, also contains
suggestions to improve investment analysis methods.
Keywords:
Information Economics, IT Evaluation, IT Assessment, Investment Analysis,
Decision Making, Information Management
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