Decison Making 2

Decison Making 2 - Todays Agenda Decision Making #2 Quiz #2...

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1 Decision Making #2 MGMT 371 – Class Session #10 Wednesday, September 17 th , 2008 Prof. Marc H. Anderson Today’s Agenda Quiz #2 Results A fun exercise The escalation of commitment Several decision biases Manipulating Decision Frames Subordinates regularly manipulate yardsticks to frame the thinking of their superiors Example: A project is budgeted at $100,000 If completed for $90,000: “I saved the firm $10,000” If completed for $110,000: “I stayed within 10% of the budget” Consider Multiple Frames When a decision makes sense and still sounds good through several different frames, it is probably a good decision Another Example of Framing “How often does life evolve to a condition of intelligence? There are those, like Ernst Mayr, one of the great biologists of the 20 th century, who argue that high intelligence has occurred only once on Earth, among something like a billion species. Hence it is a billion-to-one long shot. But Paul Horowitz, a Harvard physicist, argues that the same data can be looked at the opposite way: That on the only planet we know of that has life, intelligence appeared. That’s a one-for-one proposition.” Joel Achenbach in Best American Science Writing 2001 A Special Auction for a $20 Bill Bidding starts at $1 and has to be in $1 increments And, yes, this is for real money! No jump bidding Cartels and collusion among bidders are strictly prohibited (No communication is allowed) The highest bidder pays what they bid and receives $20 The second highest bidder pays what they bid
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2 Another Painful Example “Solzhenitsyn tells a story about applause. At the end of a Party conference in Moscow Province, a tribute to Stalin was called for. Everyone stood and clapped wildly, for three minutes, then four, then five. The clapping became more painful. It was a kind of physical embodiment of the trap people were in. Who would dare to be the first to stop? The Secretary did not dare, as his predecessor had been arrested, and the NKVD men were there watching. The painful applause went on past ten minutes, with everyone trapped in
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This note was uploaded on 03/05/2010 for the course MGNT 371 taught by Professor Anderson during the Fall '08 term at Iowa State.

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Decison Making 2 - Todays Agenda Decision Making #2 Quiz #2...

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