Information Evaluation in a Competitive Environment: Context and Task Effects.

Abstract ABSTRACT: This paper reports the results of an experiment in which subjects assumed the role of division managers in a decentralized firm and made subjective information system choices. Existing subjective information evaluation research is extended by incorporating a two-person competitive environment and investigating the effects of context and task variables on information system choice. Consistent with previous studies, subjects' information system choices indicated misperception of information values, with overvaluation of information indicated more frequently than undervaluation. Deviations from predictions of a game-theoretic model occurred under conditions of state uncertainty. Choices of subjects playing a game with equivalent payoffs, but without state uncertainty, conformed to the model, for the most part. In addition, context did not have an aggregate effect on subjects' information system choices. However, alternative presentation modes for information system costs had differing effects on choices across contexts.