First Quiz Chapter 2 Flashcards
Heuristics
rules of thumb that managers use to simplify decision making
12 common decision making errors
- overconfidence bias
- immediate gratification bias
- anchoring effect
- selective perception bias
- confirmation bias
- framing bias
- availability bias
- representation bias
- randomness bias
- sunk cost error
- self-serving bias
- hindsight bias
12 common decision making errors. overconfidence bias
think they know more than they do
12 common decision making errors. immediate gratification bias
decision makers who want immediate rewards
12 common decision making errors. anchoring effect
decision makers fixate on initial information as a starting point and then fail to adjust for subsequent information
12 common decision making errors. selective perception bias
when decision makers selectively organize and interpret events based off their biased perceptions
12 common decision making errors. confirmation bias
seek out information that supports their points and decision making
12 common decision making errors. framing bias
when decision makers select and highlight certain aspects of a situation while excluding others
12 common decision making errors. availabiltiy bias
decision makers tend to remember events that are the most recent and vivid in their memory
12 common decision making errors. representation bias
decision makers assess the likelihood of an event based on how closely it resembles other events or sets of events
12 common decision making errors. randomness bias
describes the actions or decision makers who try to create meaning out of random events
12 common decision making errors. sunk costs
when decision makers forget that current choices cant correct the past
12 common decision making errors. self-serving bias
decision makers who are quick to take credit for their success and blame failure on outside factors
12 common decision making errors. hindsight bias
decision makers who believe they couldve predicted the outcome of an event
guidelines to be a better decision maker
- understand cultural differences
- create standards for good decision making
- know when its time to call it quits
- use an effective decision making process
- develop your ability to think clearly
