Chapter 12 Flashcards
Decision Making, Creativity, and Ethics (30 cards)
what is a decision?
the choice made from two or more alternatives
what is rational?
choices that are consistent and value-maximizing within specific constraints
what is the rational decision making model?
a six-step decision-making model that describes how individuals should behave to maximize some outcome
what are the steps in the decision making model?
define the problem
identify the criteria
allocate weights to the criteria
develop alternatives
evaluate alternatives
select the best alternative
what is complete information?
problem is clear and unambiguous
what are known options?
the decision maker is able to identify all relevant options in an unbiased manner
what is bounded rationality?
refers to limitations on a person’s ability to interpret, process, and act on information
what is satisficing?
to provide a solution that is both satisfactory and sufficient
what is intuitive decision making?
an unconscious process created out of a person’s many experiences
what is an overconfidence bias?
an error in judgement that arises from being far too optimistic about one’s own performance
what is an anchoring bias?
tendency to fixate on initial information, from which one fails to adequately adjust for subsequent information
what is a confirmation bias?
tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgements
what is an availability bias?
the tendency for people to base their judgments information that is readily available to them rather than complete data
what is an escalation of commitment?
increased commitment to a previous decision despite negative information
what is a randomness error?
tendency for individuals to believe that they can predict outcome of random events
what is risk aversion?
the tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if it may have a higher expected payoff
what is a hindsight bias?
tendency to believe falsely, after an outcome of an event is known, that one could have predicted the outcome.
what is groupthink?
group pressures for conformity prevent the group from critically appraising unusual, minority, or unpopular views
what are the ‘symptoms’ of groupthink?
illusion of invulnerability
assumption of morality
rationalized resistance
peer pressure
minimized doubts
illusion of unanimity
how to minimize groupthink?
monitor group size
encourage impartial leaders
appoint a ‘devils advocate’
encourage diverse ideas for better, more fair decisions
what is groupshift?
initial positions of individual group members become exaggerated because of the interactions of the group
what are the causes of groupshift?
group familiarization
group discussion and risk-taking
group diffuses responsibility
what are the group decision making techniques?
interacting groups, brainstorming, nominal group technique
what are interacting groups?
typical groups in which members interact with one another face-to-face
