Exam 18: Biases in Managerial Decision Making

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?

Diagnosticity depends on the extent to which information implies one hypothesis over another hypothesis.

Intuitive judgments made on the basis of the representativeness heuristic tends to be non-regressive.

Managers experience the pseudodiagnosticity effect any time they treat irrelevant information as relevant.

Define the availability heuristic.

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

occurs when a decision maker continues to perceive a belief as true even when the basis for the belief is disproved.

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:

The representativeness heuristic influences causal judgments as well as judgments of category membership.

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

Information quality is determined by two factors: reliability and recentcy.

Information that doesn't fluctuate is said to be reliable.

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

When outcomes are framed in terms of losses, people are risk-seeking.

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

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

What are the biases the result from "overprocessing?"

What effect could bright color potentially have on information being presented? Why?

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

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