Narcissism, risk and uncertainties: analysis in the light of prospect and fuzzy-trace theories
DOI:
https://doi.org/10.1108/RAUSP-10-2019-0226Keywords:
Narcissism, Prospect theory, Fuzzy-trace theoryAbstract
PurposeThis study aims to analyze the relationship between the nonpathological traits of narcissism and decisions under conditions of uncertainty and risk in light of the prospect (PT) and fuzzy-trace theories (FTT).
Design/methodology/approachThis paper conducted an empirical-theoretical study with 210 Brazilian academics from the business area (accountants and managers), using a self-reported questionnaire to collect data. This paper analyzed the data through descriptive statistical techniques, correlation, test of hypotheses and logistic regression.
FindingsThe results point to a lower disposition of respondents to narcissistic traits, although the characteristics of self-sufficiency, authority, exploitation and superiority have been demonstrated. Most participants chose the sure gain in positive scenarios and risk in light of possibility of losses. However, those with high levels of narcissism showed higher propensity to make risky decisions, both in positive and negative scenarios.
Research limitations/implicationsThe empirical results about risky decision-making behavior of individuals with narcissist traits spur further investigation on the impacts of attitudes and behaviors in organizations as they are affected by psychosocial factors. These attitudes and behaviors, reflected in administrative and financial reports, influence future decisions of investors.
Originality/valueThe interaction between the areas of business administration and psychology in regard to the effects of the narcissist personality trait and the FTT is both original and valuable for the business area. The simplest scenario based on the FTT theory can help eliminate issues around the interpretation and complexities of calculations regarding decision-making scenarios in PT format.
Downloads
References
Allais, M. (1953). L’extension des theories de l’equilibre economique general et du rendement social au cas du risque. Econometrica, 21(2), 269–290. doi: 10.2307/1905539.
Amernic, J. H., & Craig, R. J. (2010). Accounting as a facilitator of extreme narcissism. Journal of Business Ethics, 96(1), 79–93. doi: 10.1007/s10551-010-0450-0.
Avelino, B. C., & de Lima, G. A. S. F. (2017). Narcisismo e desonestidade acadêmica. Revista Universo Contábil, 13(3), 70–89. doi: 10.4270/ruc.2017319.
Baron, J. (2008). Thinking and deciding, 4th ed., New York, NY: Cambridge University.
Bernoulli, D. (1954). Exposition of a new theory on the measurement of risk. Econometrica, 22(1), 23–36. doi: 10.2307/1909829.
Blickle, G., Schlegel, A., Fassbender, P., & Klein, U. (2006). Some personality correlates of business white-collar crime. Applied Psychology, 55(2), 220–233. doi: 10.1111/j.1464-0597.2006.00226.x.
Braga, R. (2015). Ganhos e perdas em investimentos: Um estudo experimental sobre personalidades à luz da teoria do prospecto e do efeito disposição. Doctoral dissertation, Universidade de São Paulo.
Brainerd, C. J., & Reyna, V. F. (2002). Fuzzy-trace theory and false memory. Current Directions in Psychological Science, 11(5), 164–169. October). doi: 10.1111/1467-8721.00192.
Brunot, A., & Brunot, A. N. (2017). Individual differences in intuitive risk judgments. Thesis. Psychology, and Business Administration. EUA: Oregon State University.
Buelow, M. T., & Brunell, A. B. (2014). Facets of grandiose narcissism predict involvement in health-risk behaviors. Personality and Individual Differences, 69, 193–198. doi: 10.1016/j.paid.2014.05.031.
Buyl, T., Boone, C., & Wade, J. B. (2017). CEO narcissism, risk-taking, and resilience: An empirical analysis in US commercial banks. Journal of Management, 45(4), 1372–1400. doi: 10.1177/0149206317699521.
Campbell, W. K., Goodie, A. S., & Foster, J. D. (2004). Narcissism, confidence, and risk attitude. Journal of Behavioral Decision Making, 17(4), 297–311. doi: 10.1002/bdm.475.
Campbell, W. K., Hoffman, B. J., Campbell, S. M., & Marchisio, G. (2011). Narcissism in organizational contexts. Human Resource Management Review, 21(4), 268–284.
Carre, J. R., & Jones, D. N. (2017). Decision making, morality, and Machiavellianism: The role of dispositional traits in gist extraction. Review of General Psychology, 21(1), 23 doi: 10.1037/gpr0000093.
Chatterjee, A., & Hambrick, D. C. (2011). Executive personality, capability cues, and risk taking: How narcissistic ceos react to their successes and stumbles. Administrative Science Quarterly, 56(2), 202–237. doi: 10.1177/0001839211427534.
D’Souza, M. F., & Lima, G. A. S. F. (2019). Um olhar sobre os traços do dark triad e os valores culturais de estudantes de contabilidade. Advances in Scientific and Applied Accounting, 1(1), 161–183.
D’Souza, M. F., Lima, G. A. S. F. D., Jones, D. N., & Carre, J. R. (2019). Eu ganho, a empresa ganha ou ganhamos juntos? Traços moderados do dark triad e a maximização de lucros. Revista Contabilidade & Finanças, 30(79), 123–138. doi: 10.1590/1808-057x201806020.
D’Souza, M. F., Oliveira, M. L. S., Almeida, J. S. C., & Natividade, D. S. (2019). EU posso, você pode, EU posso mais. Revista De Educação E Pesquisa Em Contabilidade (Repec)), 13(2) Retrieved from: https://doi.org/10.17524/repec.v13i2.2103 doi: 10.17524/repec.v13i2.2103.
D'Souza, M. F., & de Lima, G. A. S. F. (2018). Escolha de carreira: O dark triad revela interesses de estudantes de contabilidade. Revista de Contabilidade e Organizações, 12, e151837–e151837. doi: 10.11606/issn.1982-6486.rco.2018.151837.
D’Souza, M., Aragão, I. R., & De Luca, M. (2018). Análise da ocorrência de maquiavelismo e narcisismo no discurso nos relatórios administrativos de empresas envolvidas em escândalos financeiros. Revista De Educação E Pesquisa Em Contabilidade (REPeC), 12(3).
D’Souza, M. F. (2016). Manobras financeiras e o dark triad: O despertar do lado sombrio na gestão. Tese de Doutorado. São Paulo, SP: Universidade de São Paulo.
Dworkis, K. (2013). The interactive effects of incentive threshold and narcissism on managerial decision-making. Doctoral dissertation, Los Angeles, CA: University of Southern California, Retrieved from: http://digitallibrary.usc.edu/cdm/ref/collection/p15799coll3/id/129532
Edwards, W. (1954). The theory of decision making. Psychological Bulletin, 51(4), 380–417. doi: 10.1037/h0053870.
Foster, J. D., Shenesey, J. W., & Goff, J. S. (2009). Why do narcissists take more risks? Testing the roles of perceived risks and benefits of risky behaviors. Personality and Individual Differences, 47(8), 885–889. doi: 10.1016/j.paid.2009.07.008.
Freud, S. (1914). S. Freud, (Ed.), pp. 12. São PauloCompanhia das Letras: Introdução ao narcisismo, InObras completas. Tradução de Paulo César de Souzap.
Friedman, M., & Savage, L. J. (1948). The utility analysis of choices involving risk. Journal of Political Economy, 56(4), 279–304. doi: 10.1086/256692.
Góis, A. D. (2017). The dark tetrad of personality and the accounting information quality: The moderating effect of corporate reputation. Tese de Doutorado, Faculdade de Economia, Administração e Contabilidade, Universidade de São Paulo.
Jones, D. N. (2014). Risk in the face of retribution: Psychopathic individuals persist in financial misbehavior among the dark triad. Personality and Individual Differences, 67, 109–113. doi: 10.1016/j.paid.2014.01.030.
Jones, D. N., & Paulhus, D. L. (2014). Introducing the short dark triad (SD3): A brief measure of dark personality traits. Assessment, 21(1), 28–41. doi: 10.1177/1073191113514105.
Kahneman, D., & Tversky, A. (1972). Subjective probability: A judgment of representativeness. Cognitive Psychology, 3(3), 430–454.Retrieved from: https://doi.org/10.1016/0010-0285(72)90016-3 doi: 10.1016/0010-0285(72)90016-3
Kahneman, D., & Tversky, A. (1974). Judgment under uncertainty: Heuristics and biases. Science, New Series, 185(4.157), 1.124–1.131.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. doi: 10.2307/1914185.
Kimura, H., Basso, L. F. C., & Krauter, E. (2006). Paradoxos em finanças: Teoria moderna versus finanças comportamentais. Revista de Administração de Empresas, 46(1), 41–58. doi: 10.1590/S0034-75902006000100005.
Kühberger, A., & Tanner, C. (2010). Risky choice framing: Task versions and a comparison of prospect theory and fuzzy‐trace theory. Journal of Behavioral Decision Making, 23(3), 314–329. doi: 10.1002/bdm.656.
Lakey, C. E., Rose, P., Campbell, W. K., & Goodie, A. S. (2008). Probing the link between narcissism and gambling: The mediating role of judgment and decision-making biases. Journal of Behavioral Decision Making, 21(2), 113–137. doi: 10.1002/bdm.582.
Lauriola, M., & Levin, I. P. (2001). Personality traits and risky decision-making in a controlled experimental task: An exploratory study. Personality and Individual Differences, 31(2), 215–226. doi: 10.1016/S0191-8869(00)00130-6.
Lima Filho, R. N., de Souza, A. A. C., & D’Souza, M. F. (2019). Narcissistic personality traits in the context of accounting education: An application of the item response theory. Revista Universo Contábil, 15(2).
Lima, G., Avelino, B., & Cunha, J. (2018). Narcisismo: Estudantes de contabilidade estão usando seu narcisismo Para melhorar o desempenho? Revista de Contabilidade e Organizações, 11(31), 58–74. doi: 10.11606/rco.v11i31.137775.
Magalhães, M., & Koller, S. H. (1994). Relações entre narcisismo, sexo e gênero. Arq. bras. Psicol, 46(3/4), 77–93.
Majors, T. M. (2016). The interaction of communicating measurement uncertainty and the dark triad on managers' reporting decisions. The Accounting Review, 91(3), 973–992. doi: 10.2308/accr-51276.
Meisel, M., Ning, H., Campbell, W. K., & Goodie, A. S. (2015). Narcissism, overconfidence, and risk taking in U.S. and chinese student samples. Journal of Cross-Cultural Psychology, 47(3), 385–400. doi: 10.1177/0022022115621968.
Moreno, K., Kida, T., & Smith, J. F. (2002). The impact of affective reactions on risky decision making in accounting contexts. Journal of Accounting Research, 40(5), 1331–1349. doi: 10.1111/1475-679X.t01-1-00056.
Olsen, K. J., Dworkis, K. K., & Young, S. M. (2014). CEO narcissism and accounting: A picture of profits. Journal of Management Accounting Research, 26(2), 243–267. doi: 10.2308/jmar-50638.
Raskin, R., & Hall, C. S. (1979). A narcissistic personality inventory. Psychological Reports, 45(2), 590. doi: 10.2466/pr0.1979.45.2.590.
Raskin, R., & Terry, H. (1988). A principal-components analysis of the narcissistic personality inventory and further evidence of its construct validity. Journal of Personality and Social Psychology, 54(5), 890–902. doi: 10.1037/0022-3514.54.5.890.
Reche, R. A., Bertolini, A. L., & Debona, R. R. (2020). O narcisismo do consumidor e as estratégias de marketing: Uma abordagem teórica. Revista Brasileira de Gestão e Inovação (Brazilian Journal of Management & Innovation), 7(3), 165–184.
Reyna, V. F., & Brainerd, C. J. (1991). Fuzzy-trace theory and framing effects in choice: Gist extraction, truncation, and conversion. Journal of Behavioral Decision Making, 4(4), 249–262. doi: 10.1002/bdm.3960040403.
Reyna, V. F., & Brainerd, C. J. (1995). Fuzzy-trace theory: An interim synthesis. Learning and Individual Differences, 7(1), 1–75. doi: 10.1016/1041-6080(95)90031-4.
Reyna, V., Lloyd, F., & Brainerd, C. (2003). Memory, development, and rationality: An integrative theory of judgment and decision making. nS. Schneider, & J. Shanteau, (Eds), Emerging perspectives on judgment and decision research (cambridge series on judgment and decision making, pp. 201–245. Cambridge: Cambridge University Press. I doi:10.1017/CBO9780511609978.009.
Simon, H. A. (1955). A behavioral model of rational choice. The Quarterly Journal of Economics, 69(1), 99–118. doi: 10.2307/1884852.
Simon, H. A. (1963). A capacidade de decisão e liderança, Rio de Janeiro: Usaid. Obra originalmente publicada sob o título The New Science of Management Decision. New York, NY: Harper and Row, 1960).
Soane, E., & Chmiel, N. (2005). Are risk preferences consistent? The influence of decision domain and personality. Personality and Individual Differences, 38(8), 1781–1791. doi: 10.1016/j.paid.2004.10.005.
Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453–458. doi: 10.1126/science.7455683.
Von Neumann, J., & Morgenstern, O. (1944). Game theory and economic behavior, Princeton: Princeton University.
Weller, J. A., & Thulin, E. W. (2012). Do honest people take fewer risks? Personality correlates of risk-taking to achieve gains and avoid losses in HEXACO space. Personality and Individual Differences, 53(7), 923–926. doi: 10.1016/j.paid.2012.06.010.
Yang, Z., Sedikides, C., Gu, R., Luo, Y. L., Wang, Y., & Cai, H. (2018). Narcissism and risky decisions: A neurophysiological approach. Social Cognitive and Affective Neuroscience, 13(8), 889–897. doi: 10.1093/scan/nsy053.
Yoshinaga, C. E., & Carvalho, T. B. (2014). Finanças comportamentais no brasil: Uma aplicação da teoria da perspectiva em potenciais investidores. Revista Brasileira de Gestão de Negócios, 16(53), 594–615.
Downloads
Published
Issue
Section
License
Copyright (c) 2021 Márcia Figueredo D’Souza , Gerlando Augusto Sampaio Franco de Lima
This work is licensed under a Creative Commons Attribution 4.0 International License.
Management Department of the School of Economics, Management and Accounting of the University of São Paulo.
The publication of article segments is allowed, subject to prior authorization and source identification.
Copyright is regulated under Licença Creative Commons Attribution
