Answer the following statements true (T) or false (F)

Question

1. Heuristics are strategies that simplify the process of making decisions. 
2. When managers use information that is readily available from memory to make judgments, it is known as a confirmation bias.
3. Being "loss adverse" and hating to admit you're wrong can contribute to the escalation of commitment bias. 
4. Groups make better decisions than most individuals acting alone. 

Answer 1

1. TRUE
Scholars call rules of thumb heuristics, strategies that simplify the process of making decisions.
2. FALSE
The confirmation bias is when people seek information to support their point of view and discount data that do not. The availability bias means managers use information readily available from memory to make judgments.
3. TRUE
If you really hate to admit you're wrong, you need to be aware of the escalation of commitment bias, whereby decision makers increase their commitment to a project despite negative information about it. The bias is that what was originally made as perhaps a rational decision may continue to be supported for irrational reasons: pride, ego, the spending of enormous sums of money, and being "loss averse."
4. TRUE
Although groups don't make as high-quality decisions as the best individual acting alone, research suggests that groups make better decisions than most individuals acting alone.