Capital Project Information and Voters’ Decision to Finance the Project

Abstract

The purpose of this study is to apply framing concepts to decision-making behaviors in capital budgeting and to examine information cues voters use. Certain types of project information, i.e. project benefit and funding availability, are more useful as an anchor for the decision-makers than others (i.e. project accomplishment certainty) since they can reduce the uncertainty and complexity the voters face. An experimental study with random assignment of the subjects was conducted. Statistical results confirm the framing effect occurs in public capital budget decisions and project benefit and funding availability tend to drive the decision-makers to frame their decision-making.