Describe two forms of bias that adversely affect the way managers make decisions and provide an example for each.
What will be an ideal response?
Four forms of bias that can adversely affect the way managers make decisions are confirmation bias, representativeness bias, the illusion of control, and escalating commitment. Examples will vary but should include two from this list of four.
Confirmation bias results from the tendency to base decisions on strong prior beliefs even if evidence shows that those beliefs are wrong.
Representativeness bias is a cognitive bias resulting from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode.
The illusion of control is the tendency of decision makers to overestimate their ability to control activities and events.
Escalating commitment is a source of cognitive bias resulting from the tendency to commit additional resources to a project even if evidence shows that the project is failing.
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Answer the following statement true (T) or false (F)
Discuss the advantages and problems associated with test marketing.
What will be an ideal response?
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Answer the following statement true (T) or false (F)
The sixth decision making step is ________
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