MGT 3501 Lecture Notes - Lecture 4: Payless Shoesource, Predictably Irrational, Confirmation Bias
Document Summary
Study of why people act and make decisions the way they do. If you understand the dynamics of decision making, you can influence that decision in your favor. We want to be able to influence others to make the decisions we want. Price: . 25 each (average sold = 2) Price: 4 for (average sold = 4) Rational decision making: consider the options, then pick the one that maximizes profit or experience, assess pros and cons objectively without prejudice. Irrational decision making: allows irrelevant ciases, emotions, and environment to influence our decision. Most people tend to make irrational decision more than rational decision. Predictably irrational: susceptible to the same influences over and over. Firms knows how irrational we are and they know how to influence our irrationality, thus taking advantage. Restaurant provided customer exactly what he ordered after a normal wait time.
