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Product Overview

This case and its companion, "Studies in Managerial Decision Making" (QA-0494), consist of exercises that demonstrate several cognitive biases that are likely to affect judgment in decision making. They complement a curriculum focused on the normative approach to decision analysis by demonstrating real-world examples of how decision making can be skewed. The cases cover four of the main categories of heuristics: representativeness, availability, anchoring, and framing and are intended for students who have developed expertise with decision-tree analysis. (A teaching note is available.)

Learning Objectives

The class should accomplish the following objectives: • Question the way in which a choice, situation, or decision is presented • Examine what it means to be risk-seeking, risk-averse, or risk-neutral • Recast the decision in a bias-neutral manner • Identify when and why decisions will be skewed optimistically or pessimistically • Improve objective decision making through recognition and understanding of these biases • Create additional decision-analysis tools that will be applied in subsequent normative decision-analysis cases and enrich future class discussions