CH.12: Decision Making, Creativity, & Ethics Flashcards
Choice made from two or more alternatives
Decision
Refers to choices that are consistent & value- maximizing w/in specified constraints
Rational
6- step decision- making model that describes how individuals should behave in order to maximize some outcome
Rational Decision- making model
Steps in the Rational Decision- Making Model
- Define the problem
- Identify the criteria
- Allocate weights to the criteria
- Develop alternatives
- Evaluate alternatives
- Select best alternative
Limitations on one’s ability to interpret, process, and act on info
Bounded Rationality
Identifying a solution that is “good enough”, the 1st acceptable option rather than the optimal one
Satisficing
A subconscious process created out of a person’s many experiences
Intuitive decision making
Believing too much in our own ability to make good decisions
Overconfidence Bias
Using early, 1st received info as the basis for making judgments
Anchoring Bias
Selecting & using only facts that support our decision
Confirmation Bias
Emphasizing info more readily at hand
Availability Bias
Increased commitment to a previous decision even though evidence/ info is wrong
Escalation of commitment
Tendency of individuals to believe that they can predict the outcome of random events
Randomness Error
Tendency to prefer a sure thing over a risky outcome
Risk Aversion
Tendency to believe falsely, even after outcome is already known, believing it could have been accurately predicted beforehand
Hindsight Bias