DECISION MAKING ERRORS AND BIAS

Anchoring Bias:
A tendency to fixate on initial information, from which one then fails to
adjust adequately for subsequent information.
Example: 1. A real estate agent shows you the most expensive houses first. All
the other homes seem fairly priced by comparison.
Example: 2. If you see a T-Shirt that costs Rs. 1200 then you see a second one
that costs Rs. 100. You are prone to see the second t-shirt as cheap

Confirmation bias:
The tendency to seek out reaffirms past choices and discount information
contradicts past judgements.
Example: 1. Business managers want to confirm they hired the right person so
look for good things they do.
Example: 2. Black people are good at sports, Asians are good at maths.

Availability bias:
The tendency for people to base their judgements on information that is
readily available to them.
Example: 1. After seeing news reports about people losing their jobs, we might
start to believe that fear of being laid-off.
Example: 2. A person might argue that smoking is not unhealthy because they
know someone who lived to 100 and smoked three packs a day

Randomness error:
Tendency of individual to believe that they can predict the outcome of
random events
Example: 1. A manager thinks his lucky tie helps him earn a clients business at
a meeting
Example: 2. Politicians believe that distributing the money to the voters will
make them to win the election

Hindsight Bias:
Tendency of believe falsely, after an outcome of an event is actually
known, that one would have accurately predicted that outcome.
Example: In exams, Students often look back on questions and think “Of
Course! I knew it” even though they missed it the first time around.

Escalation of Commitment bias:

As increased commitment to a previous decision despite negative
information.
Example: 1. People sometimes stick to the same job they hate although they
know quitting and looking for a new job is much more better.
Example: 2. A venture capitalist might continue to back and support a project,
despite it showing signs of failure.

Submitted by:
Dhawal rawal - 20BSP0658
Kavepriya Mathialagan - 20BSP1055
Rupali chaya - 20BSP1976
M. V. S. S . Swamy - 20BSP3016
Tanisha Dhar - 20BSP2614