Decision_Making+RCL+edit E10

Decision_Making+RCL+edit E10 - PRINCIPLES OF PRINCIPLES OF...

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PRINCIPLES OF DECISION MAKING AND ECISION TRAPS DECISION TRAPS Prof. Robert Leachman E10 Jan. 27-29, 2010 Jan. 27, 2010 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 ather Intelligence Gather Intelligence Evaluate Alternatives and Make Decision Formulate model Verify model Experiment with model plement Decision Implement Decision Communicate Get Commitment Jan. 27, 2010 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 Jan. 27, 2010 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 Gather Intelligence Make Decision Formulate model Verify model Experiment with model Implement Decision Communicate Get Commitment earn from Feedback Jan. 27, 2010 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 Jan. 27, 2010 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? Jan. 27, 2010 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? Jan. 27, 2010 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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Decision_Making+RCL+edit E10 - PRINCIPLES OF PRINCIPLES OF...

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