Decision$-$Making Biases

Decision making is often a biased and flawed process. This activity is important because a person who can identify and be aware of their biases may be able to make better decisions for themselves and may be able to diagnose flawed decisions that affect their workplace.

The goal of this exercise is to test your knowledge of the ten fundamental decision$-$making biases.

Match each scenario to the decision$-$making bias that it best represents

Categorical Thinking Bias Anchoring and Adjustment Bias Overconfidence Bias Confirmation Bias Hindsight Bias Escalation of Commitment Bias Representativeness Bias Framing Bias Sunk$-$Cost Bias Availability Bias

Match each of the options above to the items below.

When she traveled to Australia on business recently, Cori assumed the weather would be the same as her home in New York. She soon found out it was winter in Australia.

$1$

Trinity tried a new sales technique with a new client. It worked! She now assumes that this technique will also work with all of her current clients.

$7$

After finally deciding on what new car to buy, Declan told his friends and colleagues about it$,$ but disregarded the things said by friends who didn$$t like the model he chose.

$4$

Zion took his older car to a mechanic and had his transmission rebuilt $($a somewhat costly repair$).$ The next week, his brakes quit working. Instead of trading the car in$,$ he put in new brakes as well, since he had already fixed the transmission.

$9$

Nishka was looking at buying a new car. After seeing the sticker prices on really expensive models, the lower$-$cost models looked even more attractive!

$2$

After a couple of weeks in his class in corporate finance, Milo decided he should be able to do just as good of a job at making investment decisions as his broker.

$3$

A new company offering office supplies opened up and Sai decided to try the new vendor, not knowing if their service would be any good. After a few months of good service, Sai looked back and felt he knew he had picked a winner all along.

$5$

When she was looking at leasing a new car, Rosa noticed that the car salesman focused more on the monthly payment than on the overall cost of the lease versus buying it outright.

$8$

Much to the dismay of her friends and colleagues, Amara decided to change cellphone carriers. She wasn$$t happy with the new service but continued to use them rather than switch back to the carrier all of her friends wanted her to use.

$6$

In order to complete a project, Melody decided to partner with someone who sat in the front of her biology class because she believed those individuals were more responsible. She found out later that the person sitting next to her in the back of the classroom was a much more ideal partner.

$10$