Chapter 7 Notes:
★ Rational decision making:
○ Involve making logical and optimal decisions
■ Stages:
● 1. Identify the problem
● 2. Think up alternative solutions
● 3. Evaluate alternative solutions & select the best
● 4. Implement & evaluate the solution chosen
★ What’s wrong with the rational model?
○ It doesn’t account for the complexity of a problem
■ Money availability to solve the problem
■ Differing cognitive capacities of team members
■ Imperfect information
■ Differing priorities
■ Conflicting goals
★ Individual biases:
○ Occur when someone engages in ‘fast thinking’
■ Availability Bias: using only the information available
■ Representativeness Bias: faulty generaling from a small sample or
single event
■ Confirmation Bias: seeking information to support POV
■ Sunk-cost Bias: money already spent seems to justify continuing
★ Rational decision making:
○ Involve making logical and optimal decisions
■ Stages:
● 1. Identify the problem
● 2. Think up alternative solutions
● 3. Evaluate alternative solutions & select the best
● 4. Implement & evaluate the solution chosen
★ What’s wrong with the rational model?
○ It doesn’t account for the complexity of a problem
■ Money availability to solve the problem
■ Differing cognitive capacities of team members
■ Imperfect information
■ Differing priorities
■ Conflicting goals
★ Individual biases:
○ Occur when someone engages in ‘fast thinking’
■ Availability Bias: using only the information available
■ Representativeness Bias: faulty generaling from a small sample or
single event
■ Confirmation Bias: seeking information to support POV
■ Sunk-cost Bias: money already spent seems to justify continuing
