OBHR 317 Chapter 9 Test With
Complete Solution
Decision - ANSWER The choice made from two or more alternatives
Rational - ANSWER Refers to choices that are consistent and
value-maximizing within specified constraints
Rational decision-making model - ANSWER A six-step decision-making
model that describes how individuals should behave in order to maximize
some outcome
Problem - ANSWER Discrepancy between some current state of affairs and
some desired state, requiring consideration of alternative courses of action
Opportunity - ANSWER Occurs when something unplanned happens, giving
rise to thoughts about new ways of proceeding
Problem clarity - ANSWER The problem is clear and unambiguous and
complete information is available
Known options - ANSWER It's assumed that the decision maker can identify
all relevant criteria, all workable alternatives, and their consequences
Clear preferences - ANSWER The criteria and alternatives can be ranked and
weighted to reflect their importance
Constant preferences - ANSWER The specific decision making criteria are
constant and weights assigned to them are stable over time
No time or cost constraints - ANSWER The decision maker can obtain full
, information about criteria and alternatives because there are no time or cost
constraints
Maximum payoff - ANSWER The decision maker will choose the alternative
that yields the highest perceived value
Bounded rationality - ANSWER Limitations on a person's ability to interpret,
process, and act on information
Satisficing - ANSWER To provide a solution that is both satisfactory and
sufficient
Intuitive decision making - ANSWER A non-conscious process created out of
a person's many experiences
Overconfidence bias - ANSWER Error in judgement that arises from being far
too optimistic about one's own performance
Anchoring bias - ANSWER A tendency to fixate on initial information, from
which one then fails to adequately adjust for subsequent information
Conformation bias - ANSWER The tendency to seek out information that
reaffirms past choices and to discount information that contradicts past
judgements
Availability bias - ANSWER The tendency for people to base their judgments
on information that is readily available to them rather than complete data
Escalation of commitment - ANSWER An increased commitment to a
previous decision despite negative information
Randomness error - ANSWER The tendency of individuals to believe that they
can predict the outcome of random events
Complete Solution
Decision - ANSWER The choice made from two or more alternatives
Rational - ANSWER Refers to choices that are consistent and
value-maximizing within specified constraints
Rational decision-making model - ANSWER A six-step decision-making
model that describes how individuals should behave in order to maximize
some outcome
Problem - ANSWER Discrepancy between some current state of affairs and
some desired state, requiring consideration of alternative courses of action
Opportunity - ANSWER Occurs when something unplanned happens, giving
rise to thoughts about new ways of proceeding
Problem clarity - ANSWER The problem is clear and unambiguous and
complete information is available
Known options - ANSWER It's assumed that the decision maker can identify
all relevant criteria, all workable alternatives, and their consequences
Clear preferences - ANSWER The criteria and alternatives can be ranked and
weighted to reflect their importance
Constant preferences - ANSWER The specific decision making criteria are
constant and weights assigned to them are stable over time
No time or cost constraints - ANSWER The decision maker can obtain full
, information about criteria and alternatives because there are no time or cost
constraints
Maximum payoff - ANSWER The decision maker will choose the alternative
that yields the highest perceived value
Bounded rationality - ANSWER Limitations on a person's ability to interpret,
process, and act on information
Satisficing - ANSWER To provide a solution that is both satisfactory and
sufficient
Intuitive decision making - ANSWER A non-conscious process created out of
a person's many experiences
Overconfidence bias - ANSWER Error in judgement that arises from being far
too optimistic about one's own performance
Anchoring bias - ANSWER A tendency to fixate on initial information, from
which one then fails to adequately adjust for subsequent information
Conformation bias - ANSWER The tendency to seek out information that
reaffirms past choices and to discount information that contradicts past
judgements
Availability bias - ANSWER The tendency for people to base their judgments
on information that is readily available to them rather than complete data
Escalation of commitment - ANSWER An increased commitment to a
previous decision despite negative information
Randomness error - ANSWER The tendency of individuals to believe that they
can predict the outcome of random events
