Decision making, creativity, ethic Flashcards
Makes consistent value-maximizing choices within specified constraints
Rational-decision making
Six step Rational choice decision-making process
- Define the problem
- Identify the criteria
- Allocate weights to the criteria
- Develop alternatives
- Evaluate the alternatives
- Select the best alternative
Assumption of rational decision making model
Problem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoff
Problem with rational-decision making
Environment constantly changing
Lack of time
Limitations on ones ability to interpret, process, and act on information
Bounded rationality
A non-conscious process created from distilled experience that results in quick decisions
Intuition
Believing too much in our own ability to make good decisions – especially when outside of own expertise
Over confidence bias
Tendency to rely too heavily on the first received information (the “anchor”) for making decisions and judgments
Anchoring bias
Selecting and using only facts that support our decision
Confirmation bias
Emphasizing information that is most readily at hand
Availability bias
Increasing commitment to a decision in spite of evidence that it is wrong – especially if responsible for the decision!
Escalation of Commitment
Creating meaning out of random events – superstitions
Randomness error
tendency to prefer a sure thing over a risky outcome
Risk aversion
After an outcome is already known, believing it could have been accurately predicted beforehand
Hindsight bias
The process of organizing and distributing an organization’s collective wisdom so the right information gets to the right people at the right time.
Knowledge management
