HROB 2010 Lecture Notes - Lecture 11: Group Decision-Making, Decision-Making, Confirmation Bias

• School: University of Guelph
• Department: Human Resources and Organizational Behaviour
• Course: HROB 2010
• Professor: Casey Cosgrove

Document Summary

Framing refers to the aspects of the presentation of information about a problem that are assumed by decision makers. How problems and decision alternatives are framed can have a powerful impact on resulting decisions. Cognitive biases are tendencies to acquire and process information in a particular way that is prone to error. They constitute assumptions and shortcuts that can improve decision-making efficiency, but they frequently lead to serious errors in judgment. The perfectly rational decision maker should be a great problem identifier. Bounded rationality, however, can lead to the following difficulties in problem identification: When a problem is identified, it is framed in some way. A ,000 expenditure can be framed as a cost or an investment. Different decision frames can lead to very different decisions. Rational decision makers should be very self-conscious about how they have framed problems. Once a problem is identified, a search for information is instigated.