Even when anchors are obviously uninformative and

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• Even when anchors are obviously uninformative and known to be biasing, we have no way to know how to undo the bias. Lecture 6 Hindsight Bias Once an outcome has occurred, we overestimate the likelihood that we would have predicted that outcome in advance. 1. Outcomes seem less surprising than they should be. 2. Outcomes seem more controllable than they actually were. 3. We are more likely to assign blame to those who failed to predict an outcome that was hard to predict. Managers should judge the quality of employees’ decisions before outcomes are realized. Employees should make sure that managers judge the quality of their decisions before outcomes are realized.
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The Curse of Knowledge When we have private information, we expect the uninformed to behave as if they know what we know. Spotlight Effect We think we’re more noticeable than we really are. Attitude Projection We tend to project our own attitudes, beliefs, and experiences onto others. Projection is pretty good when we are trying to guess the attitudes, beliefs, and behaviors of others who are similar. Projection is bad when we are trying to guess the attitudes, beliefs, and behaviors of others who are dissimilar. Biases of Knowledge and Perspective We fail to fully appreciate what life is like for those who do not share our knowledge or perspective. We often fail to ATTEMPT to appreciate what life is like for other people. We often assume that we see the world as it is…and that those who do not share our knowledge or perspective are biased, ignorant, or uninformed. We assume that those who are uninformed can be persuaded by informing them. We assume that those who are not persuaded by information must be biased or stupid. Because those who hold different beliefs must be biased or stupid, we tend to reject any proposals made by such persons. Third party mediators are often perceived as biased by both parties, as having been more receptive to concerns of the other side. Lecture 7 Cognitive Dissonance 1. That task was boring. 2. I said it was interesting. 3. I had no good reason to say it was interesting. 4. Result: unpleasant feeling of dissonance. Resolve by changing (1). Motivated Reasoning Motivated reasoning obeys “reasonableness constraints.”
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We subject claims to scrutiny, but in a biased manner. We like it: “Can I believe this?” 1. Biased memory search for consistent info 2. Partial or truncated search for information 3. Superficial processing of information We don’t like it: “MUST I believe this?” 1. Biased search for disconfirming info 2. Demand more evidence 3. Thorough consideration 4. Look for exceptions to the rule This is extremely general: we explain away our failures and take credit for our successes Fixing it Reduce flexibility.
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