Inside the Black-Box of Analysts’ Bounded Rationality: A Study of Contexts That Matter

Abstract

This study seeks to advance our understanding of how analysts’ decision contexts influence the motivational, attitudinal and relational aspects of their decision-making rationality. Based on in-depth interviews with analysts, and using the lens of the bounded rationality theory, we illustrate how the real-life complexity and ambiguity of analysts’ decision-making environment bounds the resource- and capacity-constrained analysts’ decision-making to that of satisficing. Satisficing transpires in both the means (i.e. process and mechanisms) and the ends (i.e. outputs and outcome) of their decision-making. We demonstrate how each context intensifies the impact of others, and is amplified further by analysts’ information environment, which strains analysts’ cognitive load. The revelations we provide about context-driven motivational, attitudinal and relational antecedents of analysts’ decision-making behaviour lead to a more holistic and nuanced understanding of analysts’ practice.