BUS 272 Study Guide - Randomness, Peer Pressure, Groupthink
2 Dec 2012
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Document Summary
Rational: refers to choices that are consistent and value-maximizing within specified constraints. Rational decision-making model: a six-step decision-making model that escribes how individuals should behave in order to maximize some outcome. Bounded rationality: limitations on a person"s ability to interpret, process, and act on information. Decision makers choose a final solution that satisfices rather than optimizes. Satisfice: to provide a solution that is both satisfactory and sufficient. Intuitive decision making: a subconscious process created out of a person"s many experiences. Overconfidence bias: error in judgment that arises from being far too optimistic about one"s own performance. Anchoring bias: a tendency to fixate on initial information, from which one then fails to adequately adjust for subsequent information. Confirmation bias: the tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments. Availability bias: the tendency for people to base their judgments on information that is readily available to them rather than complete data.
