Evaluation of Student's Predispositions to Decision Making Biases

Acta Univ. Agric. Silvic. Mendel. Brun. 2013, Volume 61, Issue 7, pp. 2117-2122.

The aim of the paper is to demonstrate the impact of heuristics, biases and psychological traps on the decision making. Heuristics are unconscious routines people use to cope with the complexity inherent in most decision situations. They serve as mental shortcuts that help people to simplify and structure the information encountered in the world. These heuristics could be quite useful in some situations, while in others they can lead to severe and systematic errors, based on significant deviations from the fundamental principles of statistics, probability and sound judgment. This paper focuses on illustrating the existence of the anchoring, availability, and representativeness heuristics, originally described by Tversky & Kahneman in the early 1970's. The anchoring heuristic is a tendency to focus on the initial information, estimate or perception (even random or irrelevant number) as a starting point. People tend to give disproportionate weight to the initial information they receive. The availability heuristic explains why highly imaginable or vivid information have a disproportionate effect on people’s decisions. The representativeness heuristic causes that people rely on highly specific scenarios, ignore base rates, draw conclusions based on small samples and neglect scope. Mentioned phenomena are illustrated and supported by evidence based on the statistical analysis of the results of a questionnaire.

1994

This paper presents an overview of research in the field of decision theory, with a focus on problem and identification. The goal is to make the decision-making process as rational as possible in order to maximize the rational administration of the organization. The decisions associated with educational administration can be categorized as structured (programmed and routine) or unstructured (unprogrammed and more uncertain). In the face of uncertainty, decision makers often utilize labeling of the issues as threats or opportunities. Individual behavioral factors that affect the labeling process include perceptual filters, aspiration levels, capabilities and experience, and stress. The individual decision maker also uses various heuristic devices (rules of thumb) that affect issue labeling, such as elimination by aspect, intuition, anchoring and adjustment, the availability of options, and representativeness. In conclusion, three clusters of factors affect the labeling of issues: (1) the decision maker's (educational leader's) behavioral characteristics; (2) the educational organization's performance level; and (3) the environmental influence and locus of control. The most important is the decision maker and his/her ways of gathering, manipulating, and giving meaning to information. (Contains 72 references.) (LMI)

Cognitive biases significantly influence decision-making in the business world, often leading to irrational choices that impact organizational success. This paper explores the role of cognitive biases in business decision-making and their implications for achieving business excellence. It categorizes key biases, such as confirmation bias, anchoring bias, and loss aversion, and examines their effects on leadership, strategy, and organizational behavior. Additionally, it discusses methods to mitigate these biases through evidence-based decision-making and psychological interventions. Understanding and managing cognitive biases can enhance business performance, foster innovation, and drive sustainable success.

Abstract The optimal moment to address the question of how to improve human decision making has arrived. Thanks to fifty years of research by judgment and decision making scholars, psychologists have developed a detailed picture of the ways in which human judgment is bounded.

Business: Theory and Practice, 2020

Decision-making is a multidisciplinary and ubiquitous phenomenon in organizations, and it can be observed at the individual, group, and organizational levels. Decision making plays, however, an increasingly important role for the manager, whose cognitive competence is reflected in his ability to identify potential opportunities, to immediately detect and solve the problems he faces, and to predict and prevent future threats. Nevertheless, to what extent do managers of the most diverse sectors and industries continue to rely on false knowledge when they have better strategies at their disposal? The present article proposes, through the application of bibliographically based instruments, the diagnosis of three prominent biases – overconfidence, optimism, and anchoring effect – in managers of the Portuguese port sector, as well as also seeking to establish a comparative analysis with the conclusions already documented in relation to the Brazilian civil construction sector. In addition,...

How can we improve the quality of decision making in complex organizations? Addressing this lively question is now regarded as central also in the research methods and practice field. In fact, how we explain in this work, it implies the research of appropriate methods for understanding the link between the decision makers’ personality and its distortions. In particular, this paper addresses the proposed question through a qualitative research approach, which is becoming relevant after a long period of scientific attention mainly towards quantitative research (e.g. Lee & Cassell, 2013). Qualitative research is also suitable because it offers a considerable potential for our understanding of key issues within work psychology (e.g. Cassell & Symon 2011), that is an important aspect of our paper. On this basis, in the paper we perform different qualitative analyses. First, we use a qualitative problem-solving tool recently developed by the psychologist Kahneman and colleagues (2011). Here, we try to identify and eliminate cognitive distortions in decision making through verifying, ex post, their quality. Second, we also use the MBTI personality test to capture, more effectively, the role that the decision makers’ personality may have in decision making. At the core of the work is the case study of Consorzio ELIS, which is an Italian organization that provides programmes of higher education. The case study analyzes the quality of the decision making process relating to the introduction of three new services, i.e. Business Model Lab, Pursuing Shared Value, and Business School. We believe that our study may have useful implications for the EURAM’s Research Methods and Practice SIG. The study is intended not only for those scholars and professionals interested in learning more about the way in which psychological and behavioral aspects may influence decision making, but also for those scholars interested in their methods of investigation.

Brazilian Journal of Development, 2020

Most of the analytical models used in Operations Management assume that managers are fully rational or at least can be induced to behave rationally. In view of the need to investigate the influence of cognitive biases on the decision-making process of project managers, this exploratory study based on self-report aims to detect evidence of the presence of two types of biases in the decisions of a small sample of project managers at a Brazilian research institute: anchoring and overconfidence, and to derive hypotheses based on this evidence. This study shows only partial results and aims to contribute to the literature on behavioral operations, exploring behavioral and cognitive factors in project management, demonstrating how biases can deter managers from making optimal decisions. Subsequently, a follow-up study based on controlled experiments will be developed to test the hypotheses derived from the preliminary evidence presented here. Braz. J. of Develop., Curitiba, v. 6, n. 9 , p.68693-68707, sep. 2020. ISSN 2525-8761 68694 RESUMO A maioria dos modelos analíticos utilizados na Gestão de Operações assume que os gestores são totalmente racionais ou pelo menos podem ser induzidos a se comportar racionalmente. Diante da necessidade de investigar a influência dos vieses cognitivos no processo de tomada de decisão dos gestores de projetos, este estudo exploratório baseado em auto-relatos tem como objetivo detectar evidências da presença de dois tipos de vieses nas decisões de uma pequena amostra de gestores de projetos em um instituto de pesquisa brasileiro: ancoragem e excesso de confiança, e obter hipóteses baseadas nessas evidências. Este estudo mostra apenas resultados parciais e tem como objetivo contribuir para a literatura sobre operações comportamentais, explorando fatores comportamentais e cognitivos na gestão de projetos, demonstrando como os vieses podem impedir os gestores de tomar decisões ideais. Posteriormente, um estudo de acompanhamento baseado em experimentos controlados será desenvolvido para testar as hipóteses derivadas das evidências preliminares aqui apresentadas. Palavras-chave: Gestão comportamental de operações, vieses, gestão de projetos, ancoragem, excesso de confiança.

Insight, 2018

There are things happening in the world of psychology that may affect the way decision management is viewed and practiced. Some of them are not intuitive. What sent this development into action was the awarding of the Nobel prize to two psychologists, Daniel Kahneman and Richard Thaler. Kahneman’s surprise finding described in (Kahneman 2011, 411) was that people in general have a limited ability to make good decisions. This finding raised a few eyebrows. (Thaler and Sunstein 2008) followed up with the conclusion that people can be influenced to make better decisions.

2013

This paper analyzes the effects of data presentation on decision-making using probabilistic data. It is well documented in the decision sciences literature that humans have difficulty intuitively assessing probabilistic data to make sound decisions. It is also known that decision-makers are influenced by how the data is presented. This paper presents a model of how decision-makers are subject to anchoring effects when presented with probabilistic data. We then test various techniques to mitigate the anchoring bias. We found that providing domain knowledge, i.e., a formula to guide the solution, worked best in reducing anchoring bias and helping decision makers to reach an optimal decision.