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Book Summary - Judgment in Managerial Decision Making

16 Pages 3917 Words January 2018

IT firm as it is generally conceived that not only they well, give best working environment but also treat you well. The affect heuristic can help us take intuitive and decisions and works quite similar to System 1.

Chapter 2 Common Biases
This chapter is all about the biases around us and how human behavior and actions are impacted by the same. The last chapter contained certain heuristic behaviors like availability heuristic, representative and confirmation heuristics. These heuristics covers the twelve biases as presented in the chapter. Below are the following biases –
Availability Heuristics
Ease of recall
Representative Heuristic
Base rate insensitivity
Sample size insensitivity
Misconception of chance
The Conjunction fallacy
Confirmation Heuristics
The confirmation trap
Conjunctive and disjunctive event bias
Hindsight and the curse of knowledge

We as human race heuristic or rule of thumb as it is easy to use and apply. The chapter lists twelve of the most common biases that arise due to heuristics. We tend to find shortcuts and the time savings are the arbitrage over the quality of the decision making. Generally accepting and applying these heuristics can be very damaging on the decisions we take. Due to the various kind of biases, we fail to recognize the difference between potential harmful impacts and the situations that might be beneficial for us. The human race is still entrapped by the heuristic behavior and that too without much thinking. We take most of our decisions based on recent events and experiences, emotions and matters that are interesting and arousing. We as humans pay much of the price due to ignorance of the capability of what our mind can do. We must learn to use our heuristics wisely and restrain from too much use of it.
The leanings in the chapter can be applied in many fields where we tend to take decisions based on heuristics only. We need to make su...

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