Title

An Experimental Analysis of the Effect of Data Aggregation on Decision Making

Document Type

Article

Publication Date

Summer 2004

Publication Source

Journal of Accounting and Finance Research

Volume

12

Issue

3

Inclusive pages

114-121

ISBN/ISSN

10935770

Abstract

This study used an experiment to study user preference for disaggregated versus aggregated data (Sorter, 1969). One independent and five dependent variables were examined. The independent variable, a proxy for the level of data aggregation, was databases versus an income statement. The five dependent variables studied included anticipated performance of the decision maker, the decision maker's satisfaction with the management information system (MIS), decision confidence, decision accuracy, and decision time. Graduate students from six universities acted as managers in an experimental decision-making simulation. Subjects were required to make a decision regarding whether to keep or drop a product in a hypothetical chemical company. The results indicate that users of aggregated data anticipated better performance, were more accurate, and took less time to make their decisions. No difference in satisfaction with the MIS or decision confidence was found between those using the databases and those using the income statement.

Disciplines

Accounting

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