HROB 2100 Lecture Notes - Lecture 3: Risk Aversion, Groupthink, Randomness
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18 Apr 2016
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Location, along with quality of the program alternative program. People are nice how did you evaluate your different options: Decision: choice made from two or more alternatives. Rational: choise that consistent value-maximizing within speci ed constraints. Six step decision-making process six step process rational decision making model: de ne the problem identify the criteria. 2: allocate weights to the criteria, develop alternative, evaluate the alternatives, select the best alternative. Assumptions of the rational decision-making model is using the model realistic : probably not. Limitations on ones ability to interpret, process, and act on information satis cing intuition. Judgment shortcuts overcon dence bias: believing too much in our own ability to make good decisions. Increasing commitment to a decision in sprite of evidence that it is wrong- especially if responsible for the decision. Randomness error : creating meaning out of random events- superstitions. Risk aversion hindsight bias disadvantages of making group decisions.