Scribd
Upload
105 views2 pages

Anchoring Bias:: Decision Making Errors and Bias

This document discusses several common decision-making errors and biases: anchoring bias, where initial information biases later judgments; confirmation bias, seeking to confirm past choices over contradictory information; availability bias, judging based on readily available information; randomness error, seeing patterns in random events; hindsight bias, believing one would have predicted outcomes known; and escalation of commitment bias, increasing commitment despite negative information. Examples are provided for each.

Uploaded by

Kave Mathi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
105 views2 pages

Anchoring Bias:: Decision Making Errors and Bias

This document discusses several common decision-making errors and biases: anchoring bias, where initial information biases later judgments; confirmation bias, seeking to confirm past choices over contradictory information; availability bias, judging based on readily available information; randomness error, seeing patterns in random events; hindsight bias, believing one would have predicted outcomes known; and escalation of commitment bias, increasing commitment despite negative information. Examples are provided for each.

Uploaded by

Kave Mathi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

DECISION MAKING ERRORS AND BIAS

Anchoring Bias:
A tendency to fixate on initial information, from which one then fails to
adjust adequately for subsequent information.
Example: 1. A real estate agent shows you the most expensive houses first. All
the other homes seem fairly priced by comparison.
Example: 2. If you see a T-Shirt that costs Rs. 1200 then you see a second one
that costs Rs. 100. You are prone to see the second t-shirt as cheap

Confirmation bias:
The tendency to seek out reaffirms past choices and discount information
contradicts past judgements.
Example: 1. Business managers want to confirm they hired the right person so
look for good things they do.
Example: 2. Black people are good at sports, Asians are good at maths.

Availability bias:
The tendency for people to base their judgements on information that is
readily available to them.
Example: 1. After seeing news reports about people losing their jobs, we might
start to believe that fear of being laid-off.
Example: 2. A person might argue that smoking is not unhealthy because they
know someone who lived to 100 and smoked three packs a day

Randomness error:
Tendency of individual to believe that they can predict the outcome of
random events
Example: 1. A manager thinks his lucky tie helps him earn a clients business at
a meeting
Example: 2. Politicians believe that distributing the money to the voters will
make them to win the election

Hindsight Bias:
Tendency of believe falsely, after an outcome of an event is actually
known, that one would have accurately predicted that outcome.
Example: In exams, Students often look back on questions and think “Of
Course! I knew it” even though they missed it the first time around.

Escalation of Commitment bias:


As increased commitment to a previous decision despite negative
information.
Example: 1. People sometimes stick to the same job they hate although they
know quitting and looking for a new job is much more better.
Example: 2. A venture capitalist might continue to back and support a project,
despite it showing signs of failure.

Submitted by:
Dhawal rawal - 20BSP0658
Kavepriya Mathialagan - 20BSP1055
Rupali chaya - 20BSP1976
M. V. S. S . Swamy - 20BSP3016
Tanisha Dhar - 20BSP2614

You might also like