The bottom line in context: Effects of frame, context information, and need for cognition on reactions to utility analysis

This study examined three factors that may influence perceptions of utility analysis when used for a human resource (HR) decision: the competitive context in which the utility analysis is presented, individual difference in need for cognition, and the presentation frame of the decision problem. Undergraduates (N =211) from introductory marketing classes completed the Need for Cognition measure and then read a scripted dialogue between an HR manager and a company president which described the utility analysis for a trial training program. The experimental scenarios differed between subjects by the company's context (above vs. below the competition) and utility estimate presentation frame (loss vs. gain). An ANCOVA using the believability of the experimental scenario as a covariate revealed that only the interaction between context and need for cognition was statistically significant. In the below competition condition, low need for cognition participants reported higher utility analysis usefulness reactions than high need for cognition participants. There was no difference in reactions in the above competition condition. Trends in the three-way interaction suggest that the hypothesized effects may have occurred, but were too small to be detected. In the low need for cognition group only, the effect of presenting the utility estimate as a gain from acting or as a loss from not acting depended on the competitive environment. Results suggest that perceptions of utility analysis may be influenced in a small way by frames, contextual information, and individual differences. Limitations and future research directions are discussed.