One of the sessions we have had recently in the Analysis of Business Problems course is titled “Thinking about Cognitive Biases”. It is an interesting topic and the reading materials too, are very informative.
At the end of the session, the faculty asked us to study the reading materials. One of the materials dealt with the biases in decision making.
When I began my reading, I could already question the author’s view on the topic; however after a second read, I was able to understand the author’s view points. It is an interesting resource to read and I love that the author used examples that I could relate with. I would like to share some of my key learnings from the session “Thinking about Cognitive biases” and the resource “hidden traps in decision making”.
My first lesson is that when I make a bad decision as a manager; it might not have anything to do with the decision making process. Bad decisions could sometimes be as a result of the thought process of the decision maker. This is where the biases come from.
I learned that there are Nine (9) psychological traps or biases that can undermine decision making. They are:
- Anchoring trap
- Status-quo trap
- Sunk-costs trap
- Confirming Evidence trap
- Framing trap
- Estimating and Forecasting trap
- The over-confidence trap
- Prudence trap
- Recall-ability trap