6 Perception and Decision-Making

Question 1

Define

decisions

Perception and Decision Making

Answer 1

Choices made from among two or more alternatives

Perception and Decision Making

Question 2

Define

Choices made from among two or more alternatives

Perception and Decision Making

Answer 2

decision

Perception and Decision Making

Question 3

Fill in the blank

Decision making occurs as a reaction to a ____ .

Perception and Decision Making

Answer 3

problem

Perception and Decision Making

Question 4

Define

problem

Perception and Decision Making

Answer 4

A discrepancy between the current state of affairs and some desired state

Perception and Decision Making

Question 5

List

Every decision requires twto things:

Perception and Decision Making

Answer 5

1. Interpret, and;
2. evaluate information

Perception and Decision Making

Question 6

List

generally accepted constructs of decision making

Perception and Decision Making

Answer 6

1. rational decision making
2. bounded rationality
3. intuition

Perception and Decision Making

Question 7

Define

rational

Perception and Decision Making

Answer 7

Characterized by making consistent, value-maximizing choices within specified constraints.

Perception and Decision Making

Question 8

Define

rational decision-making model

Perception and Decision Making

Answer 8

A decision-making model that describes how individuals should behave to maximize some outcome.

Perception and Decision Making

Question 9

Complete the sentence

Rationality follows…

Perception and Decision Making

Answer 9

a six-step rational decision-making model

Perception and Decision Making

Question 10

Enumerate

steps in the Rational Decision-Making Model

Perception and Decision Making

Answer 10

1. Define the problem
2. Identify the decision criteria
3. Allocate weights to the criteria
4. Develop the alternatives
5. Evaluate the alternatives
6. Select the best alternative

Perception and Decision Making

Question 11

List

3 assumptions of the rational decision-making model

Perception and Decision Making

Answer 11

1. the decision maker has complete information
2. the decision maker can identify all relevant options in an unbiased manner
3. the decision maker will choose the option with the highest utility

Perception and Decision Making

Question 12

Fill in the blank

Because the human mind cannot formulate and solve complex problems with full rationality, we operate within the confines of ____ .

Perception and Decision Making

Answer 12

bounded rationality

Perception and Decision Making

Question 13

Define

bounded rationality

Perception and Decision Making

Answer 13

A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity

Perception and Decision Making

Question 14

Define

intuitive decision making

Perception and Decision Making

Answer 14

An unconscious process created out of distilled experience

Perception and Decision Making

Question 15

Define

overconfidence bias

Perception and Decision Making

Answer 15

Individuals whose intellectual and interpersonal abilities are weakest are most likely to overestimate their performance and ability

Perception and Decision Making

Question 16

Define

anchoring bias

Perception and Decision Making

Answer 16

A tendency to fixate on initial information, from which one then fails to adjust adequately for subsequent information

Perception and Decision Making

Question 17

Define

confirmation bias

Perception and Decision Making

Answer 17

The tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments

Perception and Decision Making

Question 18

Define

availability bias

Perception and Decision Making

Answer 18

The tendency to base judgments on readily available information.

Perception and Decision Making

Question 19

Define

escalation of commitment

Perception and Decision Making

Answer 19

An increased commitment to a previous decision despite negative information.

Perception and Decision Making

Question 20

Define

randomness error

Perception and Decision Making

Answer 20

The tendency of individuals to believe that they can predict the outcome of random events

Perception and Decision Making

Question 21

Define

risk aversion

Perception and Decision Making

Answer 21

The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.

Perception and Decision Making

Question 22

Define

hindsight bias

Perception and Decision Making

Answer 22

The tendency to believe falsely, after an outcome of an event is actually known, that one would have accurately predicted that outcome

Perception and Decision Making