Deciding

Question 1

Business Case

Answer 1

Captures the reasoning for initiating a project or task.

Question 2

Opportunity Cost

Answer 2

The value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives.

Question 3

Intuition

Answer 3

Personal experience coded into your personal neural network, which means your intuition is dangerous outside the bounds of your personal experience.

Question 4

Local Optimum

Answer 4

A local optimum of an optimization problem is a solution that is optimal (either maximal or minimal) within a neighboring set of candidate solutions.

Question 5

Global Optimum

Answer 5

A global optimum is the optimal solution among all possible solutions - not just those in a particular neighborhood of values.

Question 6

Decision Tree

Answer 6

A decision support tool that uses a tree-like graph or model of decisions and their possible consequences, probability and costs.

Question 7

Sunk Cost

Answer 7

A cost that has already been incurred and cannot be recovered.

Question 8

Availability Bias

Answer 8

People tend to heavily weigh their judgments toward more recent information, making new opinions biased toward that latest news.

Question 9

Confirmation Bias

Answer 9

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.

Question 10

Loss Aversion

Answer 10

People’s tendency to strongly prefer avoiding losses to acquiring gains.