Exam 17: Biases in Managerial Decision Making

Executives are usually not susceptible to judgmental biases.

When losses loom larger than gains, people have loss aversion.

Various television shows about shark attacks makes it easy to imagine that one could be attacked by a shark when visiting the beach. This assumption is based on what effect?

Risky decision making involves making a tradeoff between the desirability and the likelihood of an outcome. However, managers often focus mainly on desirability in some situations, and focus mainly on likelihood in others. This results in inconsistent preferences. Which heuristic is responsible for this bias?

Kelly is interviewing candidates for a job in her department. She meets Bill. Bill mentions that he is from California. The last person Kelly hired from California had to be fired. Kelly infers that Bill probably won't make a good employee. Kelly is falling victim to what effect?

Which of the following heuristics involve judgment based on imagination?

What is the best way to overcome groupthink?

If less relevant information is presented in an interesting manner, it tends to have a greater impact on final decisions than if presented in a dry manner.

When managers treat irrelevant information as if it were relevant, they exhibit:

Assuming that someone's action are a reflection of their true personality or disposition, and ignoring the possibility that their behavior could be influenced by the situation is known as:

Which bias results from underprocessing?

Short-term profits are less vivid and attention-drawing than long-term profits.

Due to the assimilation effect, we tend to agree too readily with similar others.

The dilution effect is even more pronounced when subjects expect to justify their predictions to others.

Irrelevant information is weighted too lightly in judgment when irrelevant information later becomes relevant.

Which of the following is not a factor that influences vividness?

What affect does the "wording" of a problem have on managers' decisions?

John thinks Mary is a great team member in his department based on a project he worked with her on a few months ago. During a current project, John has received several complaints about Mary from various team members. Despite this, John persists in believing his initial opinion of Mary is correct. This is an example of what effect?

What are the biases the result from "overprocessing?"

A gamble has two components - an outcome and a probability.