Decision Making

Question 1

Confirmation bias

Answer 1

Overlooking data, because you are focused on proving your theory right

Question 2

Perceptual bias

Answer 2

confirmation bias
Go with what you see first/last
Go with what you like/prefer

Question 3

Decision making bias

Answer 3

Confirmation bias 
Overconfidence 
Stereotyping 
Groupthink
Group Polarization 
Framing effects

Question 4

Framing effect

Answer 4

How we view the problem can affect how we try to solve the problem.
Loss framing- Encourages risk, already losing, mind as well go for it. Also fear of loss
Gains framing- Encourages less risk, already ahead why risk it.

Question 5

Prospect theory

Answer 5

We make decisions based on the perception of loss and gains

Question 6

Escalation of commitment

Answer 6

Deals with the concept of sunk cost, the more you put into a project the more your loss is and the closer you feel to being done.

Question 7

Why does escalation of commitment persist

Answer 7

Overconfidence (Confirmation bias)
Social norms- Favours persistence
Framing- Want to avoid sunk costs

Question 8

Egocentrism

Answer 8

The loss feels greater if happens to you, that is why less likely to fall for escalation of commitment when it isn’t your money

Question 9

How to solve escalation of commitment

Answer 9

Take self out of the picture
Allow the third party to make the decision
Reward accuracy, not persistence
Remind yourself and group of actual goal at hand