Exam 17: Biases in Managerial Decision Making

In the context of a sea of numbers, verbal information will usually get lost because of the salience effect.

When an event is ambiguous, what guides interpretations? What bias can this lead to?

In preference reversal, subjects prefer one gamble when they anchor on outcomes and another when they anchor on probabilities.

Define the availability heuristic.

Basing predictions on memory usually leads to very accurate predictions.

Overcorrection occurs when managers over analyze and over interpret their decision making processes.

Which of the following heuristics involve judgments based on memory?

Focusing only on one possibility and ignoring other possibilities is known as the common knowledge effect.

After launching several new product failures, Bill believes he is "due" for a success. Bill is experiencing the gambler's fallacy.

Information that stands out from the background is said to be:

What is the difference between the dilution effect and the perseverance effect?

Anchors rarely influence expert decision makers.

Discuss the effects that often influence group decision making.

According to the contrast effect, when outcomes are framed in terms of gains, people are risk-averse.

Stores that experience extremely low sales in one sales period will typically perform better in the next sales period due to:

Sample size is paid insufficient attention to when people rely heavily on the representativeness heuristic.

Managers usually are able to express their opinions of job-related topics, despite situational pressures.

Discuss the conditions that influence whether or not information is "vivid" for a manager engaging in decision making.

When people that we meet remind us of old acquaintances because their mannerisms are similar, we often infer that these two people are likely to possess other similar characteristics.

Which of the following is not a common group decision making problem?