The hidden traps in decision making. Five Hidden Traps That Can Affect Decision Making 2022-11-03

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Decision making is a crucial aspect of our daily lives and can have significant consequences on our personal and professional endeavors. However, the process of making decisions is not always straightforward and can be influenced by various factors, some of which we may not be aware of. These factors, known as cognitive biases, can distort our perception of reality and lead us to make choices that may not be in our best interest.

One common bias that can affect decision making is the sunk cost bias. This occurs when we continue to invest time, money, or effort into something because we have already invested a significant amount in it, even if it is not yielding the desired results. We may feel that we have to see it through to the end, even if it is not a good decision. This bias can lead us to make poor decisions because we are not considering the current situation objectively and are instead basing our decisions on past investments.

Another bias that can impact decision making is the availability heuristic. This occurs when we base our decisions on information that is readily available to us, rather than considering all of the relevant data. For example, if we hear about a particular product or service through word of mouth or advertising, we may be more likely to choose it, even if there are other options that may be better suited to our needs. This bias can lead us to make hasty decisions without fully considering all of our options.

A third bias that can distort decision making is the framing effect. This occurs when the way in which information is presented influences our perception of it and, subsequently, our decisions. For example, if we are presented with two options, one framed as a gain and the other as a loss, we may be more likely to choose the option that is framed as a gain, even if it is not the best option. This bias can lead us to make decisions based on how information is presented to us, rather than on the actual content of the information.

There are many other cognitive biases that can influence our decision making, including the confirmation bias, which leads us to seek out information that supports our existing beliefs, and the Anchoring bias, which causes us to rely too heavily on the first piece of information we receive.

To avoid the hidden traps of decision making, it is important to be aware of these biases and to actively try to counteract them. This can involve seeking out diverse sources of information, considering all of the options available to us, and seeking the input of others who may have different perspectives. By being mindful of these biases and taking steps to mitigate their influence, we can make more informed and rational decisions.

[PDF] The hidden traps in decision making.

the hidden traps in decision making

Hidden traps are human biases that hinder managers from making decisions that would have the best outcomes. The two articles also identify status quo trap as one of decision making traps that is common with many decision makers. The bank finally solved the problem by instituting a policy requiring that a loan be immediately reassigned to another banker as soon as any problem arose. We share a natural aversion when it comes to taking actions for which we may be held to account. Some of us may even decide not to get ready at all. A decision-maker should avoid this trap by challenging one's perceived high-end or low-end estimates.

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Hidden Traps in Decision Making

the hidden traps in decision making

Because we frequently base our predictions about future events on our memory of past events, we can be overly influenced by dramatic events—those that leave a strong impression on our memory. . They can also believe that a decision-maker is unwilling to change. One should also avoid holding onto the initial thought but rather think of other alternatives. For airline pilots, though, the distortion can be catastrophic. Expand Powerful new decision-support tools can help executives quickly sort through vast numbers of alternatives and pick the best ones, and when combined with the experience, insight, and analytical skills of a good management team, these tools offer companies a way to make consistently sound and rational choices even in the face of bewildering complexity. The authors give an example that illustrates the point clearly.

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Hidden Traps in Decision Making

the hidden traps in decision making

However, according to Henman, failure to frame can lead to a decision maker making decisions that are beyond the scope of decision issues. Human biases can affect how these individuals make decisions by leading them into hidden traps or decision-making traps. Mostly from distortions and biases—a whole series of mental flaws—that sabotage our reasoning. Keeney, and Howard Raiffa examine eight psychological traps that can affect the way we make business decisions. It can also occur due to a need to avoid taking action for which one can be held accountable. However, prior preparation is not the only necessary condition for good decision. These routines are based on experimentation, trial and error methods, and are proved to be potential psycological traps that may blind the dicision makers and undermine their decisions.

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Decision Traps in Decision Making

the hidden traps in decision making

One should also overcome the challenge of feeling a negative effect on self-esteem when one makes a wrong decision. Avoid the tendency to accept confirming evidence without question. Although group decisions can be affected by decision traps, the many individuals involved help to minimize the occurrence of errors. However, Henman identify additional decision trap that is associated with group decision. You will assign a higher probability to traffic accidents if you have passed one on the way to work, and you will assign a higher chance of someday dying of cancer yourself if a close friend has died of the disease.

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The Hidden Traps of Decision Making Essay

the hidden traps in decision making

It is the system that comes into play after system 1, and which attempts to employ rationality, reflection, context. Because they are hardwired into our thinking process, we fail to recognize them—even as we fall right into them. Worse, these traps can amplify one another—compounding flaws in our reasoning. Identify other options and use them as counterbalances, carefully evaluating all the pluses and minuses. For instance, mistake in decision making can have high financial implication while others can result in the loss of business opportunity. When decision-makers remain overconfident and do not listen to the employees, the employees can become hostile. There is a current state which needs to be changed.

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The Hidden Traps in Decision Making

the hidden traps in decision making

These routines, known as heuristics, serve us well in most situations. The strikingly different responses reveal that people are risk averse when a problem is posed in terms of gains barges saved but risk seeking when a problem is posed in terms of avoiding losses barges lost. The effect of anchors in decision making has been documented in thousands of experiments. When comparing alternatives, always evaluate them in terms of the future as well as the present. Because the resulting distortion poses few dangers for most of us, we can safely ignore it.


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Five Hidden Traps That Can Affect Decision Making

the hidden traps in decision making

In most instances, people want to justify their past decisions even if they were wrong. The following are the different types of decision-making traps that top-level managers can fall into. Worst-case analysis added enormous costs with no practical benefit in fact, it often backfired by touching off an arms race , proving that too much prudence can sometimes be as dangerous as too little. They should also evaluate all possible alternatives and compare them against the ultimate goal to ensure they choose the best alternative. This model trying to explain the human mind in action when making decisions accounts for our mental, time, and resources limits.

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The Hidden Traps in Decision Making Flashcards

the hidden traps in decision making

Linda Henman, in her article, How to Avoid the Hidden Traps of Decision Making, looks at the ways in which decision traps can be avoided when making decisions Henman, 2006, p. This will help in knowing when one is trapped in the decision making traps and enable one to make better decisions Henman, 2006, p. One should avoid this trap by looking for innovative ways to address challenges and brainstorm new ideas. The habit of these conflicting tendencies allows great hypothesis on the end result of the behavior. To avoid the anchoring trap, one should remain open-minded and seek different opinions while hiding the initial thought first. Group decision trap, according to her, can lead to major error in decision making. Another trap for forecasters takes the form of overcautiousness, or prudence.

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The Mind is Our Own Hidden Trap in Decision Making

the hidden traps in decision making

The manager does so despite the product having a higher chance of failing in the market. Always check to see whether you are examining all the evidence with equal rigor. Some people may even question whether free will is a believable concept. First impressions are everything but people are better at relative thinking than absolute thinking. This bias leads us to seek out information that supports our existing instinct or point of view while avoiding information that contradicts it. The consequence of anchoring trap is failure to consider all the facts or information when making decision.

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