MGMT 105 Lecture Notes - Lecture 3: Confirmation Bias, Sunk Costs, Business Ethics
20 Feb 2017
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Overconfidence bias when we are given factual questions and asked to judge probability that our answers are correct, we tend to be far too optimistic. Anchoring bias fixating on initial information and failing to adjust for subsequent information. Happens when we are blinded by first impressions or influenced by first impressions, ideas, prices, or estimates relative to info received later. Framing tendency to be influenced by the way a problem is formulated even though it should not affect the solution. Selective perception seeing things from our own personal perspective. Organizing and interpreting events or information based on this perception. Influences what we pay attention to, the problems we identify, and the alternatives we develop or consider. Availability bias relying upon knowledge that is readily available rather than examine other alternatives or procedures. The most recent and memorable information is given preference. Sunk costs and constraints tendency to honor already spent resources that are not affected by present or future decisions.
