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The contribution of behavioral economics to crisis management decision-making

Published online by Cambridge University Press:  18 December 2017

John A. Parnell  and
William ‘Rick’ Crandall
John A. Parnell*
Affiliation:
School of Business, University of North Carolina at Pembroke, Pembroke, NC, USA
William ‘Rick’ Crandall
Affiliation:
School of Business, University of North Carolina at Pembroke, Pembroke, NC, USA
*
Corresponding author: [email protected]
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Abstract

Scholarly work in the field of crisis management has flourished in recent years with contributions from numerous disciplines, including strategic management, organizational behavior, public relations, risk management, and disaster management. However, the substantial and prospective applications from behavioral economics – from Herbert Simon to modern theorists – have yet to be systematically integrated into the literature. This paper presents a framework that categorizes applications from behavioral economics along three stages of the crisis management life cycle – crisis preparation, crisis action, and postcrisis. It provides insights for scholars and practitioners into the crisis decision-making process and outlines why ‘less-than-rational’ decision-making approaches often appear in crisis environments.

Keywords

behavioral economicscrisis managementdecision-makinguncertainty
Type
Research Article
Information
Journal of Management & Organization , Volume 26 , Issue 4 , July 2020 , pp. 585 - 600
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2017

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