ORGS 4560 Lecture Notes - Lecture 8: Risk-Seeking, Sunk Costs
9 May 2016
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Document Summary
The way the human brain works can sabotage our decisions. heuristics unconscious routines used to cope w/ complexities of decisions sometimes fail to recognize these biases. When considering a decision, the mind gives disproportionate weight to the first information it receives -> initial impressions, estimates, or data anchor subsequent thoughts and judgments. Includes comments heard, stereotypes, historical data, an opponent"s initial offer. What can you do about it: always view a problem from different perspectives. Think through your position before any negotiation begins in order to avoid being anchored by the other"s initial proposal look for opportunities to use anchors to your own advantage. Decision makers display a strong bias toward alternatives that perpetuate the status quo. Most find the status quo comfortable, and they avoid taking action that would upset it. Breaking from the status quo means taking action, and when we take action, we take responsibility, thus opening ourselves to criticism and to regret.
