SMO301 Chapter Notes - Chapter 11: Daniel Kahneman, Rationality, Confirmation Bias
8 Apr 2020
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Involves making a choice among several action alternatives: a process. Information search: too little information, confirmation bias occurs when you seek information that will conform to your definition or solution of the problem, too much information, information overload can lead to errors, omissions, delay, and cutting corners. Alternative development: anchoring effect, illustrates that decision makers do not adjust their estimates enough from their initial guess that serves as an anchor, a perfect decision maker can evaluate the solutions against economic gain. The bounded decision maker must factor in political acceptability: satisficing, the decision maker sets a level of acceptability and screens solutions until they find one that exceeds this level, when this happens, alternatives are not sought out. Prospect theory: seek a risk to avoid a loss, avoid a risk to hold a gain. Sometimes groups protect themselves and make bas decisions. Stimulating and managing controversy: someone should be the devil"s advocate and challenge the existing strategy.
