m4ch2

Question 1

What are the two ways or systems of thinking?

Answer 1

system 1: intuition
system 2: slow and logical

Question 2

What is the rational model of decision making?

Answer 2

explains how managers should make decisions

Question 3

What are the 4 steps of rational model of decision making?

Answer 3

1- identify the problem
2- generate alternative solutions
3- evaluate alternatives and select a solution
4- implement and evaluate the solution chosen

Question 4

What is the problem with that model?

Answer 4

people are not rational when making complex decisions

Question 5

What is bounded rationality?

Answer 5

ability to make decisions bounded by constraints

Question 6

What is satisficing?

Answer 6

choosing a solution that meets some minimum qualifications, one that is “good enough”

Question 7

What is intuition?

Answer 7

judgments, insights, or decisions that come to mind on their own without evoking cues

Question 8

What is the two forms of intuition: holistic hunch vs automated experience?

Answer 8

holistic hunch: a subconsious judgement
automated: a choice based on familiar situations

Question 9

What are the two sources of intuition?

Answer 9

expertise and feelings

Question 10

What are the two types of expertise?

Answer 10

explicit and tacit

Question 11

What are judgmental heuristics?

Answer 11

cognitive shortcuts or biases that are used to simplify decision making

Question 12

What is confirmation bias?

Answer 12

selective information gathering

Question 13

What is overconfidence bias?

Answer 13

results in us overestimating our skills relative to those of others and accuracy of our predictions

Question 14

What is the availability heuristic?

Answer 14

tendency to based decisions on information that is readily available in memory

Question 15

What is the representativeness heuristic?

Answer 15

used when people estimate the probability of an event occurring

Question 16

What is anchoring bias?

Answer 16

decision makes are influenced by the first information received about a decision, even if its irrelevant

Question 17

What is hindsight bias?

Answer 17

when knowledge of an outcome influences our belief that we could have predicted the outcome earlier

Question 18

What is framing bias?

Answer 18

relates to the manner in which a question is posed or framed

Question 19

What is escalation of commitment bias?

Answer 19

tendency to stick to an ineffective course of action when it prob won’t change

Question 20

What is decision making style?

Answer 20

how an individual perceives stimuli and the general manner in which they chose to respond to such information

Question 21

What are the two dimensions of the decision making model?

Answer 21

tolerance for ambiguity and value orientation

Question 22

What is directive? Analytical? Conceptual? Behavioral?

Answer 22

Directive- low abmiguity, task oriented
Analytical- high abmiguity, task oriented
Conceptual- high abmiguity, people oriented
Behavioral- low abmiguity, people oriented