Managing Biases in Strategic Judgment Heuristics and Rules of thumb • People rely on various heuristics when making most decisions –Evolutionary reasonable strategy –Helpful but can lead to severe errors –Can result in biases –People are unaware of using heuristics most of the time –Why important to understand • Can correct/debias yourself • Understand what others are doing in deciding on your actions/strategies • Example: Recognition heuristic –Which city has a large population
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CHAPTER 4 Objectives: 1. Define consciousness.--------- 2. Appreciate the role of the circadian rhythm. 3. Describe the stages (5) of sleep including the sequence of the stages. The development of the electroencephalograph led to dramatic increases in what is known about sleep. When electrodes are attached to the face and scalp of sleepers‚ different patterns are produced on the graphic record called the electroencephalogram or EEG. The patterns vary in frequency and amplitude of the waves
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undertaking work in this area. It has already led to some important findings that challenge the ways in which organizations think about consumer choice. The research has focused on two fundamental types of thinking. On the one hand‚ there’s ’heuristic processing’‚ which involves very shallow thought and is based on very simple rules: 1) buy what you recognize‚ 2) choose what you did last time‚ or 3) choose what a trusted source suggests. This requires comparatively little effort‚ and involves
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the achievement of a successfully virtual store. Concretely‚ the aim of this study is to identify the key factors that influence the degree of success of the websites. Specifically‚ we focus on the specific elements related to the web design. A heuristic analysis‚ which is based on the assessments of a multidisciplinary group of experts‚ was carried out in order to find out and better understand the good and bad practices of two well-known websites. The literature review and the results of the
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Pitfalls and Limitations of Decision Making Heuristics and Biases: ‘People rely on a limited number of heuristic principles which reduce the complex tasks of assessing probabilities and predicting values to simpler judgmental operations.’ (Kahneman et. al‚ 1974) Heuristics are cognitive shortcuts or ‘rules of thumb’ used to simplify the decision making process. Heuristics result in good decisions and their main asset is that they save time. Most of the heuristics are used by people with specific cognitive
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Revision Questions – Social Psychology (PAUL) Mon 20th May BASICS 1. What is the definition of social psychology? Allport (1954) – “the scientific investigation of how thoughts‚ feelings and behaviours of individuals are influenced by others” 2. What is the main issue surrounding the measurement of behaviour? Behaviours can be observed and measured however the feelings‚ thoughts‚ beliefs‚ intentions‚ goals and motivations that go behind the behaviours are not observable making measuring
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of class quiz answers with the objective of introducing the concept of Biases 5 Heuristics and Biases Case Study on Sell-side analyst bias 6 Heuristics and Biases Loss aversion Case Study on loss aversion 7 Heuristics and Biases Group Behavior‚ Placebo Effect‚ Causality Class experiment on Ultimatum Game 8 Heuristics and Biases Sunk cost‚ Case study on Sunk cost 9 Heuristics and Biases Closed end fund puzzle‚ Overconfidence bias and excessive trading Endowment
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Regret aversion bias: People make decisions made on the anticipated risks. They don’t want to become the active agent in a wrong decision. A major study was done to understand this bias. A flu epidemic has hit your community. This flu can be fatal for children under the age of three. The probability of a child getting the flu is 1 in 10‚ and 1 in 100 children who get the flu will die from it. This means that‚ statistically speaking‚ 10 out of each 10‚000 children in your community will die. A vaccine
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Individual Project: Framing Theory Tiffani Stephenson University of Florida I. Theory summary— The Framing Theory is a concept of “cognitive categorization‚” with the basis that “meaning depends on context” (Scheufele 1999‚ Changingminds.org). Under the framing theory‚ an audience’s attention is drawn to events or issues placed within a frame‚ or a field of meaning‚ rather than on a particular topic. Although this sounds very similar to that of the Agenda Setting theory‚ framing is often a conscious
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cognitive/judgmental error or biases can be applied to organizational behavior for continually adopting and improving better decision making strategies as a manager. The book focuses on descriptive approach to managerial decision making i.e. understanding decision heuristics in complex management environments and the resulting biases from them which gives a better insight into the decision making process‚ dependencies and strategies. For managers it is crucial to make decisions‚ and also understand the Decision
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