ADMS 2511 Lecture Notes - Lecture 21: Face-Off, Bounded Rationality
ADMS 2511 Lecture 21 Notes – Judgment Shortcuts and should you stand still or leap into
action?
Introduction
• A reet stud that eaied peoples ailit to use their gut to ake deisios foud
that ot eeroes gut is reliale.
• For some, the physiological feeling that one associates with intuition works, but for
others it does not.
• Proal the est adie fro oe epert is this: Ituitio a e er useful as a a
of settig up a hpothesis ut is uaeptale as proof.
• Use hunches based on experience to speculate, yes, but always make sure to test those
hunches with objective data and rational analysis.
• Intuition is also part of spirituality, a burgeoning area of interest to OB scholars, as OB
on the Edge—Spirituality in the Workplace demonstrates.
Judgment Shortcuts
• Decision makers engage in bounded rationality, but they also allow systematic biases
and errors to creep into their judgments.
• To minimize effort and avoid trade-offs, people tend to rely too heavily on experience,
impulses, gut feelings, and convenient rules of thumb. Shortcuts can be helpful.
• However, they can lead to distortions of rationality, as OB in the Street shows.
Should you stand still or leap into action?
• This is the classic question facing a goalie in a faceoff against a midfielder for a penalty
kick.
• Ofer H. Azar, a lecturer in the School of Management at Ben-Gurion University in Israel,
finds that goalies often make the wrong decision.
• Why?
• The goalie tries to anticipate where the ball will go after the kick.
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