INSEAD Library

Doriot: for 2017-2018 courses

Includes bibliographical references and index

Digitized

Judgment in Managerial Decision Making Contents Chapter 1 Introduction to Managerial Decision Making The Anatomy of Decisions System 1 and System 2 Thinking The Bounds of Human Rationality Introduction to Judgmental Heuristics An Outline of Things to Come 1 1 3 4 6 10 Chapter 2 Common Biases Biases Emanating from the Availability Heuristic Biases Emanating from the Representativeness Heuristic Biases Emanating from the Confirmation Heuristic Integration and Commentary 13 18 21 28 40 Chapter 3 Bounded Awareness Inattentional Blindness Change Blindness Focalism and the Focusing Illusion Bounded Awareness in Groups Bounded Awareness in Strategic Settings Bounded Awareness in Auctions Discussion 42 46 47 48 50 51 59 61 Chapter 4 Framing and the Reversal of Preferences 62 Framing and the Irrationality of the Sum of Our Choices We Like Certainty, Even Pseudocertainty The Framing and the Overselling of Insurance What's It Worth to You? The Value We Place on What We Own Mental Accounting 65 67 70 71 72 74 Do No Harm, the Omission Bias, and the Status Quo Rebate/Bonus Framing Joint Versus Separate Preference Reversals Conclusion and Integration 76 78 79 82 Chapter 5 Motivational and Emotional Influences on Decision Making When Emotion and Cognition Collide Positive Illusions Self-Serving Reasoning Emotional Influences on Decision Making Summary 84 84 90 94 96 99 Chapter 6 The Escalation of Commitment The Unilateral Escalation Paradigm The Competitive Escalation Paradigm Why Does Escalation Occur? Integration 101 103 105 108 112 Chapter 7 Fairness and Ethics in Decision Making 113 Perceptions of Fairness Bounded Ethicality Conclusion 113 122 134 Chapter 8 Common Investment Mistakes The Psychology of Poor Investment Decisions Active Trading Action Steps 136 138 145 147 Chapter 9 Making Rational Decisions in Negotiations 151 A Decision-Analytic Approach to Negotiations Claiming Value in Negotiation Creating Value in Negotiation The Tools of Value Creation Summary and Critique 152 155 156 161 166 Chapter 10 Negotiator Cognition The Mythical Fixed Pie of Negotiation The Framing of Negotiator Judgment Escalation of Conflict 168 168 169 171 Overestimating Your Value in Negotiation Self-Serving Biases in Negotiation Anchoring in Negotiations Conclusions 172 174 176 178 Chapter 11 Improving Decision Making Strategy 1: Use Decision-Analysis Tools Strategy 2: Acquire Expertise Strategy 3: Debias Your Judgment Strategy 4: Reason Analogically Strategy 5: Take an Outsider's View Strategy 6: Understand Biases in Others Conclusion References Index 179 181 186 189 191 193 195 198 200 223