Does experience matter in lending? : a process-tracing study on experienced loan officers' and novices' decision behavior

• This empirical study investigates the effect of experience on decision behavior in lending to small firms. There were three groups of participants, business students (n=19), junior loan officers (n=19), and senior loan officers (n=23), reflecting the following three levels of experience: novice, intermediate experience, and expert. Participants interacted with a software program and ade decisions about two realistic loan propositions. The results showed that: (i) senior loan officers acquired significantly more cues than the other two groups; (ii) the three groups had similar levels of internal consistency; (iii) neither senior nor junior loan officers acquired information in an active manner; (iv) senior loan officers tended to be cautious whereas novices plunged into judgment and decision-making; (v) senior loan officers were biased towards rejecting; and (vi) junior and senior loan officers took more time before making decisions. Besides the contribution to our understanding of experienced decision-makers in business life, the findings have implications for research on decision-making, small business finance, banking, and risk research.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

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