Managing Organizational Behavior 2nd Edition by Timothy Baldwin,Bill Bommer,Robert Rubin

Exercise 11

Avoiding Common Decision Errors
Putting your answers in the grid that follows, respond with your fi rst instinct to each of the following six items. Also include your level of confi dence in each of the responses you provide.
A. Which is the more likely cause of death in the United States: being hit by a falling airplane part or being attacked by a shark?
B. Take just fi ve seconds for each mathematical string and estimate the multiplicative product of 8 × 7 × 6 × 5 × 4 × 3 × 2 × 1, and then 1 × 2 × 3 × 4 × 5 × 6 × 7 × 8.
C. You have been carefully monitoring two slot machines in a Las Vegas casino. One has paid off twice in the last hour. The other has not paid off. You are now ready to play yourself. Which one of those machines would give you the best chance of winning?
D. Suppose each of the following cards has a number on one side and a letter on the other, and someone tells you: "If a card has a vowel on one side, then it has an even number on the other side." Which card(s) would you need to turn over in order to decide whether the person is lying?
• Card 1: E
• Card 2: K
• Card 3: 4
• Card 4: 7
E. Which city is located farther north, New York, NY, or Rome, Italy?
F. Six months ago, you sank the last $5,000 of your student loan money into the purchase of a stock that was highly recommended to you by a trusted family friend. As of today, the stock has already dropped 20 percent and is now worth just $4,000. You are nervously ready to sell, but you simply cannot afford to lose that $1,000 (plus commission costs) and still pay for school next year. Would you sell?
How confident are you in each of your decisions to these problems? Do you suspect there might be inaccurate biases or judgment errors in any of your decisions? Are there any keys or cues you can look for to avoid falling prey to the most common and insidious judgment errors and decision traps?