Judgement & Decision Making Flashcards
Describe the Prescriptive Decision Model.
identify problem–>define objectives–>identify criteria–>alternatives–>assign value–>make decision–>implement–>follow up
What are some assumptions in prescriptive decision making?
all information is knowable, clear & constant utilities, no bias
What characteristics of problems make prescriptive decisions difficult?
inputs are rarely quantifiable, biases play, satisficing,
What is the most important takeaway from Prospect Theory?
losses loom larger than gains
Define Heuristic
simplifying strategy in cognition & decision
Define Bias
systematic partiality; consistent under- or over-estimate that distorts accurate consideration of an issue
Define Sunk Cost Bias
using retrospective outlays - that have already been incurred and are unrecoverable - in evaluating future options
What can sunk cost bias lead to?
escalation of commitment
Describe the “availability heuristic.”
ease of info access in memory increases judgements of perceived likelihood - most recent & vivid impressions are over-weighed
Describe the “representative heuristic.”
tendency to assess likelihood of event based on a likelihood of similar proxy
Describe the “anchoring heuristic.”
weighing early or “nearby” information too heavily as basis for subsequent judgements
What are some examples of self-serving bias?
conflict of interest, overclaiming credit, fundamental attribution (of cause) error
What is Confirmation Bias?
tendency to seek out information supporting current inclination rather than do full search
What is Status quo Bias?
tendency to favor options making least change to current circumstances
What is Omission Bias?
implicit belief that harm caused by action is morally worse than equivalent harm caused by inaction
