Expertise in Credit Granting

284 Pages·2008·4.75 MB·English

Expertise in Credit Granting:
Studies on Judgment and Decision-Making Behavior
~~ STOCKHOLM SCHOOL OF ECONOMICS
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Expertise in Credit Granting:
Studies on Judgment and Decision-Making Behavior
Patrie Andersson
E~ STOCKHOLM SCHOOL OF ECONOMICS
:'7
EFI,THEECONOMICRESEARCH INSTITUTE
Dissertation for the degree ofDoctorofPhilosophy, Ph.D.
StockholmSchool ofEconomics 2001
© EFI and the author
ISBNNR 91-7258-557-9
Keywords:
behavioral accounting
creditgranting
creditmanagers
decision-making
expenence
expertise
experts
economic psychology
judgment
loan officers
novices
process-tracing
Coverillustration: Eclipse ofa thoughtby Jonas Ekstrand-Andersson
Printedby: Elanders Gotab, Stockholm2001
Distributedby:
EFI, The Economic Research Institute
StockholmSchool ofEconomics
P.O. Box 6501, SE-113 83 Stockholm, Sweden
Web page: www.hhs.se/efi
To mom and dad

PREFACE
This report is a result of a research project carried out at the Center for
Economic Psychology at the Economic Research Institute at the Stockholm
School ofECOI10miCS.
The present volume is subrrritted as a doctoral dissertation at the Stockholm
School ofEconomics. As is usual at the Economic Research Institute, the author
has been entirely free to conduct and present his research in his own way as an
expression ofhis own ideas.
The Economic Research Institute is grateful for the financial support given
to the present research project by Sparbankemas' Research Foundation, Ruben
Rausing's Foundation for Research on New Firm Creation and Innovation, and
Handelbanken's Research Foundations. This volume would not have been
realized without the cooperation of the loan officers and credit managers
participating in the project. The Economic Research Institute wishes to thank
warmly all the peopleinvolved for their support and participation.
Stockholmin March2001
Bo Sellstedt Lennart Sjoberg
Directorofthe Economic Professor, Head ofthe Center for
Research Institute at the Economic Psychologyat the
StockholmSchool ofEconomics StockholmSchool ofEconomics

ACKNOWLEDGEMENTS
The present dissertationonjudgment and decision-making behavior illustrates in
a way my own judgment and decision-making for the last six years. I made a
crucial decision when I decided to start postgraduate studies. The reasons for
this decision were my curiosity, my thirst for knowledge, and my appetite for
analyzing problems. That decision has then pushed me to make further
judgments and decisions, which eventually resulted in the present research
endeavor. This endeavor could not have been accomplished without judgment
and decision-making (JDM) ofdifferent people to whomIam much grateful.
First, Iwish to express my deep appreciation to my chiefdissertation advisor
Prof. Lennart Sjoberg for his guidance, his wide experience, and his confidence
in my research ideas. His suggestion that I would employ an economic
psychological perspective has brought me into many exciting research areas and
stimulated my curious, inquiring, and analytic mind. He has also spurred me to
apply for grants and scholarships, to acquire international experience in terms of
attending conferences and spending an academic year abroad, as well as to get
my work published. As aresult, Ibelieve that Ihave blossomed out as a capable
and independentresearcher.
Iwould also like to acknowledge my gratitude to my co-advisors, professors
IngolfStahl and Henry Montgomery, for their friendly support and their critical
but helpful comments on preliminary manuscripts. Their different roles have
been highly appreciated. Ingolfpinpointed weak spots in my writing and gave
me instant support when needed. At numerous occasions, I have had the
pleasure of sharing his wits. Henry introduced me to the research area of
judgment and decision-making, invited me to interesting seminars with leading
researchers, and gave me creative suggestions for analyzing data.
Besides my dedicated hard work and my harmonious thesis committee, this
research endeavor has been enabled by financial support. Scholarships from
Sparbankernas' Research Foundation and grants from Ruben Rausing
Foundation for Research on New Firm Creation and Innovation are gratefully
acknowledged. I am obliged to Handelsbanken's Research Foundations for
funding my academic year abroad. I have also gratefully received financial
support from StockholmSchool ofEconomics (SSE).
I am also thankful for the cooperation of the loan officers and credit
managers participatingin this research endeavor.
Second, I am grateful for advice and comments from Prof. Bo Ekehammar
as well asthe course onirrationalitygiven byProf. Robyn Dawes.
My sincere thanks go to the following persons. To my companion in the
postgraduate program, Jan Edman (now Ph.D.), for smart viewpoints,
stimulating discussions, fun conference memories, and introducing me to a
master of computer programming. To this master, Magnus Dahlberg, for
implementing my idea ofsoftware tracking decision-behavior in credit-granting.
To Caroline Nordlund for carefully checking the language. To Jaan Grunberg
and Jan Tullberg for enlightening conversations. To Mattias Ekman and Mattias
Viklund for sport-talks and jokes. To my office-roommates for cheerful chats.
Additional thanks are givento all my friends and colleagues at the Centerfor
Economic Psychology and other departments at SSE as well as friends and
colleagues elsewhere. I do not explicitly mention your names, but you know
who you are. A similar feeling of gratitude is expressed to the mailmen al1d
otherstaff-members at SSE for good service.
Third, some words about my academic year abroad. I am grateful to Prof.
Jay Russo for inviting me to work with him and his research group at Cornell
University. To my pal Kurt Carlson, who helped me to settle down, and to other
friends, and faculty members for giving me a great time in Ithaca: Thank you
all! I am obliged to Prof. Patrick Humphreys for the opportunity to come to
London School ofEconomics (LSE). To Maria R, colleagues at LSE, the JDM
group, and others for making my London-staymemorable: Cheers and thanks!
Finally, I would like to express my sincerest appreciation to my brother and
my sister with relatives. I am particularly indebted to my brother for the cover
illustrationand his professionalhelp with the coverand printingmatters.
Last but not least, my biggest debt ofgratitude goes to my dear parents for
their ever-lasting, invaluable, and huge encouragement and support. All the
strains and demands ofthis research endeavorbecame, therefore, much easier to
bear and I am happyto be able to dedicate this volume to you.
StockholmMarch 26, 2001,
Patrie Andersson