ORGS 4560 Lecture Notes - Lecture 9: Status Quo, Sunk Costs, Risk-Seeking
28 Mar 2016
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Document Summary
Higher the sakes of the decision, higher the risk of getting caught in a thinking trap; forewarned is forearmed. Bad decisions come from distortions and biases. Fault lies in the mind of the decision maker. Invincibility of the traps makes them dangerous: hardwired into our thinking. Initial impressions, estimates, and data anchor subsequent judgements/thoughts. Giving dis-proportionate weight to irst information you receive. Avoiding the trap: pursue other lines of thought; view problem from diferent perspectives, see information from a variety of people and sources, don"t be anchored by someone"s initial proposition; think about your own position. Decision makers have strong bias towards alternative that perpetuate status quo. Breaking from status quo = taking action = more responsibility = more criticism. Choosing option a or b = efort, choosing status quo avoids all efort. Making choices in a way that justiies past lawed choices. Sunk costs: old investment of time and money that are now irrecoverable.
