Chapter 7: Decision Making Flashcards
A natural tendency for people to be influenced by an initial anchor point, such that they do not sufficiently move away from that point as new information is provided.
Anchoring and adjustment heuristic
A natural tendency to assign higher probabilities to objects or events that are easier to recall from memory, even though ease of recall is also affected by non probability factors ( emotional response, recent events(.
Availability heuristic.
The View that people are bounded in their decision-making capabilities, including access to limited information, limited information processing, and tenancy toward satisfying rather than maximizing when making choices.
Bounded rationality.
The processing of screening out information that is contrary to our values and assumptions, and to more readily accept confirming information.
Confirmation bias.
The conscious process of making choices among Alternatives with the intention of moving towards some desired state of affairs.
Decision making.
The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.
Escalation of commitment.
I preferred alternative that the decision maker uses repeatedly as a comparison with other choices.
Implicit favorite.
The ability to know when a problem or opportunity exists and to select the best course of action without conscious reasoning.
Intuition.
Knowledge structures that we develop to describe, explain, and predict the world around us.
Mental models.
An innate tendency to feel stronger negative emotion from losing a particular amount then positive emotion from gaining an equal amount.
Prospect theory effect.
The process of using pure logic and all available information about all alternatives to choose the alternative with the highest value.
Rational Choice decision making.
A natural tendency to evaluate probabilities of events or objects by the degree to which they resemble parentheses a representative of parentheses other events or objects rather than the objective probability information.
Representativeness heuristic.
Selecting an alternative that is satisfactory or “good enough”, rather than the alternative with the highest value (maximization)
Satisficing
A systematic process of thinking about alternative Futures and what the organization should do to anticipate and react to those environments.
scenario planning.
A person’s inherent motivation to have a positive self-concept ( and to have others perceive him or her favorably (, such as being competent, attractive, lucky, ethical, and important.
Self enhancement.
