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MANG2008 L17 Cognitive Biases

MANG2008 Lect17 - Cognitive Biases
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Tim B

on 5 January 2011

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Transcript of MANG2008 L17 Cognitive Biases

Dr Tim Bolt
School of Management
The University of Southampton
tim.bolt@soton.ac.uk Lecture 17:
CONSIDERING
COGNITIVE BIASES MANG2008
MANAGEMENT RESEARCH LECTURE OBJECTIVES Identify common heuristics and resulting cognitive biases which may affect researchers and research subjects

identify strategies to take these into account and address contive biases in research design
WHAT IS
A HEURISTIC? a shortcut for making a complex decision

not fully analsysing all possible data and options

absolutely necessary, but . . .

... if the heuristic is wrong, however, then poor decisions are likely to result from its use.

A flawed heuristic used repeatedly can result in systematic errors. FURTHER READING & RESOURCES FRAMES NOT USED WHAT IS
'COGNITIVE BIAS'? flaws in judgement based on
difficulty processing evidence...

information processing heuristics
innumeracy & statistics
social influences
motivational factors
- Miles & Huberman (1994) Qualitative Data Analysis: An expanded sourcebook (2nd ed.)

not possible for researchers to be totally objective ! Other books in library: Judgment under uncertainty : heuristics and biases
Kahneman, Daniel; Slovic, Paul & Tversky, Amos
BF 441 JUD

Predictably irrational : the hidden forces that shape our decisions
Dan Ariely
BF 448 ARI

Heuristics and biases : the psychology of intuitive judgement
Gilovich, Thomas.
BF 447 GIL

Judgment and decision making
Hardman, David (David K.)
BF 447 HAR

Choices, values, and frames
Kahneman, Daniel
HD 30.23 KAH "To do this, you will
need a variety of safeguards against
tunnel vision, bias, and self-delusion." COGNTIVE BIASES:
The Big Four... Kahneman, Slovic & Tversky (1982)
Judgement under Uncertainty Three Main
Heuristic Principles respresentativeness
availability
anchoring Primacy vs Recency KEF
LAK
MIL
NIR
VEK
LUN
NEM
BEB
SAR
FIF Primacy - early info has the greatest impact

Recency - most recent message has greatest impact Primacy vs Recency no definitive list
&
there is much
overlap in the effects / definition of each How do you make decisions?

What factors do you consider in your decisions?

How good is your judgement? Confirmation bias
Seeking information that confirms early beliefs and ideas
Ease of recall bias
Relying too much on information that is easy to recall from memory
Anchoring bias
Too much emphasis on the first piece of information encountered
Sunk-cost bias (escalating committment)
Not treating past investments (time, effort, money) as sunk-costs when deciding to continue an investment
assumes the decision maker can identify and evaluate all possible alternatives and their consequences and rationally choose the most appropriate course of action.


most appropriate decision in light of what managers believe to be the most desirable future consequences for their organization.

Jones, G.R. & George J.M. (2003) Contemporary Management (3rd Ed.) Classical Model of Decision Making





Optimum decision






In all research, but particularly qualitative... Daniel Craig David Attenborough David Beckham Gordon Brown Lewis Hamilton Linford Christie John Cleese Jeremy Paxman Paul McCartney Nick Clegg Prince Charles Ricky Gervais Robbie Williams Rowan Atkinson Sacha Baron Cohen (Ali G) Simon Cowell Stephen Fry Tim Berners-Lee Tony Blair Helen Mirren Jade Goodey Kate Beckinsale Kate Winslet Kathy Cook Kelly Holmes Lilley Allen Maggie Smith Myra Hindley Queen Elizabeth II Ruth Kelly Sally Gunnall Sharon Davies Tessa Jowell Theresa May Victoria Beckham Victoria Pendelton How many words can you think of with "T" as the first letter? How many words can you think of with "T" as the third letter? Gilovich et al., p104 Availability Heuristic


Recall Bias Asymmetric Dominance Effect
(Irrelevant Alternative)
Decoy Effect The Cost of Cognition... Example:
The Exotic Jam Experiment.
w/ limited choice: 30%
w/ extensive choice: 3% When Choice is Demotivating: Can One Desire Too Much of a Good Thing?
Sheena S. Iyengar & Mark R. Lepper 6 choices vs 24-30 choices Your
Dissertation Topics? Hindsight Bias view past events as more predictable
than they really were believe that they knew the outcome of the event before it actually happened "I knew that all along."
“I told you so!” selectively reconstructing the events ?
impact on judging other's decisions ?

IMPACT ON YOUR RESEARCH DESIGN? Availability Heuristic Self-Serving Bias thinking past decisions
are better than they were Asymmetric Dominance Effect
(Irrelevant Alternative)
Decoy Effect Confirmation Bias one special case is:
"Experimenter Bias" selectively collecting new evidence
biasedly interpreting evidence
selectively recalling information "Difficult Decisions"
Close options
very different attributes choice-supportive
bias Priming Social / Market norms
Economics & Rationality
East Asian Women & maths
Honesty Anchoring MUST CONSIDER THE ANCHOR IN THE DECISION CONTEXT
within the
"focusing effect" When there is a lack of a
reference point
Full transcript