090209Decision_Making RCL edit

090209Decision_Making RCL edit - PRINCIPLES OF DECISION...

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RINCIPLES OF PRINCIPLES OF DECISION MAKING ND AND DECISION TRAPS rof Rhonda Righter Prof. Rhonda Righter Prof. Robert Leachman 10 E10 Sept. 2-4, 2009 Sept. 2, 2009 Decision Making Prof. Leachman 1
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OR = Scientific Method for Decision Making Observation Framing Define problem or issue Formulate hypotheses/ generate alternatives th I t lli Gather Intelligence Evaluate Alternatives and Make Decision Formulate model Verify model Experiment with model plement Decision Implement Decision Communicate Get Commitment Sept. 2, 2009 Decision Making Prof. Leachman 2 Learn from Feedback
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DECISION TRAPS Russo and Schoemaker (and Ariely, Kahnemann & Tversky, Righter) 1 Plunging In Beginning to gather information and reach conclusions without first observing what’s going on, thinking about the crux of the issue ou’re facing and thinking through how you you re facing and thinking through how you believe decisions like this one should be made xamples: Slow baggage Pay equity Sept. 2, 2009 Decision Making Prof. Leachman 3 Examples: Slow baggage, Pay equity
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Scientific Method for Decision Making Observation Framing Define problem or issue Formulate hypotheses/ generate alternatives th I t lli Gather Intelligence Make Decision Formulate model Verify model Experiment with model plement Decision Implement Decision Communicate Get Commitment Sept. 2, 2009 Decision Making Prof. Leachman 4 Learn from Feedback
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raming Traps 2 Frame Blindness Framing Traps Setting out to solve the wrong problem because you have created a mental framework for your decision, with little thought, that causes you to overlook the best options or to lose sight of important objectives 3 Lack of Frame Control Failing to consciously define the problem in more ways than one or being unduly influenced Sept. 2, 2009 Decision Making Prof. Leachman 5 by the frames of others
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raming Trap Example Framing Trap Example ituation A: You have decided to see a play and Situation A: You have decided to see a play and bought a ticket for $30. As you enter, you discover that you’ve lost the ticket. Would you pay another $30 for another ticket? Sept. 2, 2009 Decision Making Prof. Leachman 6
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raming Trap Example Framing Trap Example ituation A: You have decided to see a play and Situation A: You have decided to see a play and bought a ticket for $30. As you enter, you discover that you’ve lost the ticket. Would you pay another $30 for another ticket? Situation B: You have decided to see a play that costs $30, but haven’t purchased a ticket. As you enter, you discover you’ve lost $30 from your ll t W ld b $30 ti k t? wallet. Would you buy a $30 ticket? Sept. 2, 2009 Decision Making Prof. Leachman 7
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raming Trap Example unk Costs Framing Trap Example – Sunk Costs Situation A: You have decided to see a play and bought a ticket for $30. As you enter, you discover that you’ve lost the ticket. Would you pay another 30 for another ticket? $30 for another ticket?
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090209Decision_Making RCL edit - PRINCIPLES OF DECISION...

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