Chapter 11

Question 1

Decision making:

Answer 1

A process of delvoping a commitment to some corse of action

Question 2

perfect rationality, bounded ratioanlity, framing and congiitive biases

Answer 2

perfect rationality,: a desision strategied that is compleemtly infromed, perfectly logical and oriedted toward economci gain

bounded rationality: a deisison strategy that relsies on liimtied informationa nd reflects time contracts and poltiial consideration

framing: aspects of tje presenation of infromatio about a probelm that are assuemd bt deisison makers

cogntiie biases: tedndences to acquire and process ifnromation in an error prone way

Question 3

infromation search: confirmation bias, finromation overload

Answer 3

too little finromation can cuase confimraito bias, which is a tendyc to seek out nformation that confromt to one’s own defiifntion of or solsution to a problem

too much ifnromation - ifnromation overlao
reception of more finromation than is necessary to effective decision

Question 4

maximization, anchroing effect, satificing

Answer 4

maximxiation: deisison with greatest expected value

Anchroign effect: the adequete adjustment of subejequet estimats from an intital esitmate that serves an anchor
he anchoring effect is a cognitive bias that describes the human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decision

sacrificing: establishsif na adequte level fo acctptiability ot a proelm and then screeing solution until one exceeds this level found

Question 5

sunk cost, hindisght and how deos modod and emotion affect deissio making?

Answer 5

is teh cost already invested and it should not eb used

hindsight: tendendyc to review the deisison making process to seee what went wrong

emotionaless deisison making = poor deision ,aking

poitive mood: remmebers positive info evaltuing things positively, voerestime likely of good events

negative mood: remember ngative infp and overestimaes the likely hood of bad events

Question 6

diffusion repsosmibitliy, groupthink syntomics

Answer 6

diffusion repsosmibitliy: ability of group memebr to share the burden of the negative consequefnes of a poor deisison

groupthink: capacity for group pressure to damage the mental effect, reality testing anf more judgment of design making

groupthink sysntomtis:
1) illusion of Invulnerability
2) rationalization
3) illusion or moraltiy
4) stereotypes of outsider
5) pressure for confmoity
60 self-censorship
7) illusion of unanimity
8) mind guards

This term seems to have been a misunderstanding. Typically, the relevant term is “Illusion of Invulnerability,” which refers to group members feeling overly optimistic and taking excessive risks. If “Illusion of Individuality” was intended, it could suggest a mistaken belief that individual actions or opinions can significantly impact group consensus or outcomes, overshadowing the collective nature of decision-making in a groupthink scenario.
Rationalization:
Group members justify decisions and ignore any counter-evidence. This prevents critical analysis and leads to uniformity in decision-making without considering potential flaws or alternatives.
Illusion of Morality:
The group believes in the inherent morality of their actions, leading them to overlook the ethical or moral consequences of their decisions. This reinforces a positive self-image of the group but can lead to unethical outcomes.
Stereotypes of Outsider:
The group develops negative views of those outside the group, considering opposition as too evil, weak, or stupid. This devaluation of external critiques further isolates the group from dissenting viewpoints.
Pressure for Conformity:
Members feel pressure to conform to the group’s consensus, discouraging dissenting opinions or criticism. This can suppress individual dissent and lead to uniform but potentially flawed decisions.
Self-Censorship:
Individuals withhold their dissenting views and doubts due to the fear of disrupting the consensus or facing isolation from the group. This reduces the diversity of opinions considered in the decision-making process.
Illusion of Unanimity:
The group perceives that everyone is in agreement, even if this is not the case. This illusion is often supported by self-censorship and direct pressure on dissenters.
Mind Guards:
Some members act as “mind guards,” protecting the group from information that might challenge the group consensus or cause members to reconsider their views. This can further entrench the group’s position and prevent consideration of alternative perspectives.

Question 7

Lack of controvery can be bad which is why we may need devil advice

Answer 7

devil advocate is a peron appotinted to idneifiy and challenge teh wekaness of a prose plan or strategy

Question 8

how do groups handle risk?

Answer 8

risky shift: tenddny for groups to make risier desision than the avergae risk intitally advocted by thier indidivual mmebers

coinserative short: tenddncy for groups to make less risk deisisoin than the avergae risk adoted by thier indidivualnmemebers

two main factros of conservative and risky shiftt
1) groups enerate more ideas and arguments
2a) group memebrs try to present themsevles as simislar to other ember

Question 9

contporary approahces to imprving deisison making

Answer 9

• evidene based managemtn
  crowdsourcing
  analytics
  bid data

evidence based: making deiiso throught the consents , exotic and judixious use of the best avaable evidece from mutliple sources

crowdsourcing: outsorucing aspects of. sdeision to a alarge collection of people

analytics: finding emsanfiul patters in large dataset

big dataa: copitous amount of ifnromation that are often collected in real time and can ceom from a wide variety of sources