BUS 478 Lecture Notes - Lecture 3: Sunk Costs, Risk-Seeking
28 Dec 2018
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Week 4: the hidden traps in decision making. When considering a decision, the mind gives disproportionate weight to the first information it receives. Initial impressions, estimates, or data anchor subsequent thoughts and judgments. Always view a problem from different perspectives. Think about the problem on your own before consulting others in order to avoid becoming anchored by their ideas. Be careful to avoid anchoring your advisers, consultants, and others from whom you solicit information and counsel. Be particularly wary of anchors in negotiations. The source of the status-quo trap lies deep within our psyches, in our desire to protect our egos from damage. Breaking from the status quo means taking action, and when we take action, we take responsibility, thus opening ourselves to criticism and to regret. Always remind yourself of your objectives and examine how they would be served by the status quo. Never think of the status quo as your only alternative.
