MGT 400 Exam 4: Chapter 6

perception

~: a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment

availability bias

TYPE OF BIAS: -- the tendency for people to base their judgments on information that is readily available to them

overconfidence bias

TYPE OF BIAS: -- the tendency to overestimate the accuracy of one's beliefs and judgments, which proves to be a hindrance in problem solving

confirmation bias

TYPE OF BIAS: -- the tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments.

escalation of commitment

example: a friend admits having issues with his girlfriend, but still is going to marry her because he has a lot invested in the relationship.

external

When we make judgments about the behaviors of other people, we tend to underestimate the influence of ___ factors.

personal characteristics

When you look at a target and attempt to interpret what you see, your interpretation is heavily influenced by your __ __ - your attitudes, personality, motives, interests, past experiences, and expectations.

rational

While intuition isn't ___, it isn't necessarily wrong.

anchors

___ are widely used by people in professions in which persuasion skills are important - advertising, management, politics, real estate, law, etc.

context

____ (the time at which we see an object or event) can influence our attention, as can location, light, heat, or any number of situational factors.

internally

____ caused behaviors are those we believe to be under the personal control of the individual.

externally

_____ caused behaviors are what we imagine the situation forced the individual to do.

bounded rationality

~: a process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

self-fulfilling prophecy

~: a situation in which a person inaccurately perceives a second person, and the resulting expectations cause the second person to behave in ways consistent with the original perception

attribution theory

~: an attempt to determine whether an individual's behavior is internally or externally caused

escalation of commitment

~: an increased commitment to a previous decision in spite of negative information

intuitive decision making

~: an unconscious process created out of distilled experience

rational

~: characterized by making consistent, value-maximizing choices within specified constraints

decisions

~: choices made from among two or more alternatives

rumination

~: compulsive fretting; overthinking about our problems and their causes

contrast effect

~: evaluation of a person's characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics

stereotyping

~: judging someone on the basis of one's perception of the group to which that person belongs

escalation of commitment

~: refers to staying with a decision even when there is clear evidence it's wrong

self-serving bias

~: the tendency for individuals to attribute their own successes to internal factors and put the blame for failures on external factors

randomness error

~: the tendency of individuals to believe that they can predict the outcome of random acts

hindsight bias

~: the tendency to believe falsely, after an outcome of an event is actually known, that one would have accurately predicted that outcome

halo effect

~: the tendency to draw a general impression about an individual on the basis of a single characteristic

risk aversion

~: the tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff

risk aversion

~: the tendency to prefer a sure thing over a risky outcome

selective perception

~: the tendency to selectively interpret what one sees on the basis of one's interests, background, experience, and attitudes

fundamental attribution error

~: the tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others.

contrast effect

"Never follow an act that has kids or animals in it" demonstrates how a ___ ___ can distort perceptions. -- we don't evaluate a person in isolation. our reaction is influenced by other persons we have recently encountered.

consistency

1/3 DETERMINING FACTORS OF ATTRIBUTION THEORY: -- does the person respond the same way over time?

hindsight bias

~ reduces our ability to learn from the past. It lets us think we're better predictors than we are and can make us falsely confident.

attribution theory

~ suggests that when we observe an individual's behavior, we attempt to determine whether it was internally or externally caused.

availability bias

~: Events that evoke emotions, are particularly vivid, or are more recent tend to be more available in our memory.

rational decision-making model

~: a decision-making model that describes how individuals should behave in order to maximize some outcome

problem

~: a discrepancy between the current state of affairs and some desired state

pygmalion effect

-- Aka self-fulfilling prophecy -- describe how an individual's behavior is determined by others' expectations

consensus

1/3 DETERMINING FACTORS OF ATTRIBUTION THEORY: -- if everyone who faces a similar situation responds in the same way, we can say the behavior shows ___.

distinctiveness

1/3 DETERMINING FACTORS OF ATTRIBUTION THEORY: -- refers to whether an individual displays different behaviors in different situations -- (is the behavior unusual? If it is, external. If not, internal.)

more

Achievement-striving individuals appear (more/less) susceptible hindsight bias.

more

Achievement-striving people were (more/less) likely to escalate their commitment.

distinctiveness, consensus, consistency

Attribution theory suggests that when we observe an individual's behavior, we attempt to determine whether it was internally or externally caused. That determination depends largely on THREE FACTORS:

perceptual

Awareness that a problem exists and that a decision might or might not be needed is a ___ issue.

unquantifiable

Because intuition is ____, it's hard to know when our hunches are right or wrong.

bounded rationality

Because the human mind cannot formulate and solve complex problems with full rationality, we operate within the confines of __ __.

selective perception

Because we can't observe everything going on about us, we engage in ___ ___.

background

Because we don't look at targets in isolation, the relationship of a target to its background also influences perception, as does our tendency to group close things and similar things together.

individual differences

Decision making in practice is characterized by bounded rationality, common biases and errors, and the use of intuition. In addition, ___ ___ create deviations from the rational model.

problem

Decision making occurs as a reaction to a ____.

less

Dutiful people were (more/less) likely to escalate their commitment.

intuition

For most of the 20th century, experts believed decision makers use of intuition was irrational and ineffective. We now recognize that rational analysis has been overemphasized and, in certain instances, relying on ____ can improve decision making.

external

If consensus is high, you would probably give an (internal/external) attribution to the employee's behavior.

internal

If consensus is low, you would probably give an (internal/external) attribution to the employee's behavior.

external

If distinctiveness is high, (internal/external) judgement?

internal

If distinctiveness is low, (internal/external) judgement?

consensus

If everyone who faces a similar situation responds in the same way, we can say the behavior shows ___.

affectively charged

Intuitive decision making is ___ ___, meaning it usually engages the emotions.

holistic associations

Intuitive decision making occurs outside conscious thought; it relies on __ __, or links between disparate pieces of information; it's fast; and it's affectively charged, meaning it usually engages the emotions.

heuristics

It's less difficult to deal with an unmanageable number of stimuli if we use ____ or stereotypes.

satisfice

Many problems don't have an optimal solution because they are too complicated to fit the rational decision-making model. So people _____ (they seek solutions that are satisfactory and sufficient).

confident

Most studies suggest that people are more willing to buy on credit and spend more money when they feel ___.

perception

People's behavior is based on their ____ of what reality is, not on reality itself.

intuitive decision making

Perhaps the least rational way of making decisions is ~, an unconscious process created out of distilled experience.

overconfidence

Relating to the 2008 recession, ___ bias by both lenders and borrowers about the ability to pay back loans was clearly a major factor.

confirmation

Relating to the 2008 recession, investors deliberately avoided negative information about investments, an example of ___ bias.

rational decision-making model

SIX STEPS OF THE ~: -- define the problem -- identify the decision criteria -- allocate weights to the criteria -- develop the alternatives -- evaluate the alternatives -- select the best alternative

escalation of commitment

Specific facets of conscientiousness - rather than the trait itself - may affect ~.

T

T/F: Because we cannot assimilate all that we observe, we take in bits and pieces. But we don't choose randomly; rather, we select according to our interests.

T

T/F: Decision makers engage in bounded rationality, but they also allow systematic biases and errors to creep into their judgments.

T

T/F: Every decision requires us to interpret and evaluate information.

T

T/F: Information we gather is typically biased toward supporting views we already hold.

T

T/F: Many problems don't have an optimal solution because they are too complicated to fit the rational decision-making model.

T

T/F: Most decisions in the real world don't follow the rational model.

T

T/F: Most interviewer's decisions change very little after the first 4-5 minutes of an interview.

T

T/F: Most research suggests that there are differences across cultures in the attributions people make.

T

T/F: One of the most interesting findings from attribution theory research is that errors or biases distort attributions.

T

T/F: People with high self-esteem are strongly motivated to maintain it, so they use the self-serving bias to preserve it.

T

T/F: Research shows we form impressions of others within a tenth of a second, based on our first glance.

T

T/F: Sometimes a fast-and-frugal process of solving problems might be your best option.

T

T/F: The little research so far conducted on personalty and decision making suggests personality DOES influence our decisions.

T

T/F: The rational decision-making process assumes we objectively gather information. But we don't. We selectively gather it. --> confirmation bias

T

T/F: To minimize effort and avoid difficult trade-offs, people tend to rely too heavily on experience, impulses, gut feelings, and convenient rules of thumb. These shortcuts can be helpful, but they can also distort rationality.

T

T/F: We don't have evidence on whether dutiful people are immune to hindsight bias.

T

T/F: When we make judgments about the behaviors of other people, we tend to underestimate the influence of external factors and overestimate the influence of internal or personal factors.

anchoring bias

TYPE OF BIAS: -- a tendency to fixate on initial information, from which one then fails to adequately adjust for subsequent information

external

The less consistent the behavior, the more we are inclined to attribute it to (internal/external) causes.

internal

The more consistent the behavior, the more we are inclined to attribute it to (internal/external) causes.

utility

The rational decision-making model relies on a number of assumptions, including that the decision maker has complete information, is able to identify all the relevant options in an unbiased manner, and chooses the option with the highest ___.

perceived

The world as it is ___ is the world that is behaviorally important.

rational decision-making model

The ~ relies on a number of assumptions, including that the decision maker has complete information, is able to identify all the relevant options in an unbiased manner, and chooses the option with the highest utility.

rational

We often think the best decision maker is ___ and makes consistent, value-maximizing choices within specified constraints.

generalizations

We rely on ___ everyday because they help us make decisions quickly.

hindsight

We should be careful not to commit to ___ bias and conclude after financial crises have dissipated that it should have been obvious problems were about to occur.

availability bias

This bias is why people are afraid to fly vs. ride in the car even though more people die in car accidents than plane crashes.

confirmation bias

Those who feel there is a strong need to be accurate in making a decision are less prone to ~.

heurstics

short cuts (rules of thumb) used to reduce amount of thinking needed to make a decision; aka stereotyping

randomness error

superstitious behavior relates to this... decision making suffers when we try to create meaning in random events.

anchoring bias

this occurs because our mind appears to give a disproportionate amount of emphasis to the first information it receives