Decision making

Question 1

What are some factors that may influence individual decision making ?

Answer 1

• Overconfidence
• Confirmation bias
• Escalation of commitment
• Framing effect

Question 2

What are some factors that may influence group decision making ?

Answer 2

• Groupthink
• Group polarization

Question 3

What is the definition of decision making ?

Answer 3

• The process of developing a commitment to some course of action

Question 4

What is rational decision making ?

Answer 4

• step by step process
• Clearly defined problem
• Complete and accurate information
• Knowledge of all possible alternatives and their consequences

Question 5

What is perfect rationality ?

Answer 5

• It is a decision strategy that is completely informed , perfectly logical and oriented toward economic gain

Question 6

What is bounded rationality ?

Answer 6

• A decision making strategy that relies on limited information and that reflects time constraints and political considerations

Question 7

What is overconfidence bias ?

Answer 7

• This is when you don’t accurately perceive risk , willing to take risk

Question 8

What is confirmation bias ?

Answer 8

• The tendency to seek out information that conforms to ones definition of , or solution to the problem

Question 9

What is escalation of commitment ?

Answer 9

• Continuing to pursue a failing course of action because of sunk costs
• throw even more resources after a failed action thinking it might help

Question 10

What is sunk costs ?

Answer 10

• Permanent losses of resources incurred as the result of a decision
• Since these reproduces have been lost due to a past decision , they should not enter into future decisions

Question 11

What is the framing effect ?

Answer 11

• The manner in which objectively equivalent alternatives are presented

Question 12

What are the differences between the gain and loss frame in the framing effect ?

Answer 12

• The gain frame highlights the positive outcomes which will encourage conservative behaviour and we will take the sure thing rather than taking a risk at gaining more
• The loss frame highlights the negative so it encourages risk and we take a chance at losing rather than accepting a sure loss

Question 13

What is a groupthink bias ?

Answer 13

• Its when group pressure damages the quality of group decision
• it favours the agreement of all group mates over quality decisions
• one reason of process losses in teamwork

Question 14

What are some signs of groupthink ?

Answer 14

• feeling under pressure
• feeling they are doing what is moral or “right”
• exhibiting defensiveness
• teams isolating themselves from external sources of information
• minimizing the public expression of doubt

Question 15

How can we avoid groupthink ?

Answer 15

• Devils advocate
• objective leaders ( don’t state ideas first )
• use subgroups to work on same problems
• Norms that encourage dissent and communication

Question 16

What is group polarization ?

Answer 16

• it is when group discussions seems to polarize or exaggerate the initial portion of the group
• individuals tend to express slightly more extreme views during discussion