Hi guys, welcome back. We would identify more hidden traps. Yesterday, we already discussed two of such traps we often encounter while making decision; anchoring and sunk cost traps.
Anchors relates to the first information that catches our attention, we are likely going to give it more weight than necessary, thus affecting other criteria. Sunk cost on the other hand happens, when we are afraid of making mistakes; we make decisions that further justifies the wrong decisions we had made earlier.
Let us identify three other types of traps and how we can avoid them.
STATUS QUO TRAP
Here, the decision maker chooses a decision option that allows existing situation to continue. He does not want to upset existing and comfortable status quo. Many times decision makers wants to stick to status quo because it is less expensive and may seem comfortable.
For example, the manager for of a key merger may refuse to change the management structure of the the acquired company, simply because, he did not want to alter the status quo. This decision may have a negative impact later because the time the change would have been readily accepted is during the merger, waiting much longer can mean resistant or more cost.
To avoid this trap, ask yourself these questions:
a) Suppose this option is not a status quo will still have choose it?
b) Does this status quo serve your objective?
IDENTIFY CONFIRMING EVIDENCE
In this trap, the decision maker already have an existing view point; but wants to get information or opinions of others to validate the option he already have in mind.
For instance, a person who want to sell his car, seek advice from someone who had already sold his. To a large extent, the friend would tell him to go ahead.
To avoid this, check that you examine all evidences with same rigor; ask respected colleague to argue against your potential decision not asking them to further reinforce an idea you already had.
Estimating and forecasting: This trap is as a result of the decision maker been influenced by vivid memories; hence, he estimates wrongly.
For example, because media often publicize large or massive court awards on cases, lawyers often offer large settlements on their cases. To avoid this trap, when forecasting, ensure you get actual statistics not just impressions. Also, be discipline in your forecasting; always start with consideration of extremes and then challenge same.
It is important that we familiarize ourselves with these hidden traps, even if we cannot take them away or avoid them completely, our knowledge of them helps us to b conscious in our decision making and we are thus in a better position to make good decisions.