MGT Test 2 Overview

MGT Test 2 Overview - Traditional Economic Model...

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Traditional Economic Model (certainty) Decisions are made under conditions of certainty Managers seek to maximize benefits and they are completely rational Behavioral Model (risk or uncertainty) Decisions are made under “bounded rationality” Satisficing rather than maximizing Bounded rationality – limited mental capacity, emotional state, unforseeability of future events Availability Heuristic Used when managers assess frequency of event by degree to which those instances of that event are easily recalled in memory Overestimate frequency – causes event to be remembered Underestimated frequency – can’t remember an event Representativeness Heuristic Managers use stereotypes/categories in making judgments Irrational/Implicit Favorite Model (uncertainty) Basically, when we pick a favorite and no matter what we do are biased toward that favorite Superhero Technique Used to stimulate creativity and overcome traditional ways of perceiving and thinking
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MGT Test 2 Overview - Traditional Economic Model...

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