BBA 3826BBA 3826: Unit II EssayColumbia Southern University, Lecture notes of Accounting

Download BBA 3826BBA 3826: Unit II EssayColumbia Southern University and more Lecture notes Accounting in PDF only on Docsity! BBA 3826 BBA 3826: Unit II Essay Columbia Southern University BBA 3826: Unit II Essay There are many different biases in decision-making. For this assignment, I will describe each of the three general heuristics, which had been discussed in this unit. I will then describe how one of these heuristics, associated with bias, plays a part in an original decision-making scenario. I will also provide an explanation of how biases could have been overcome, to improve the decision, in the discussed scenario. The Availability Heuristic The availability heuristic speaks to how we recall things, based on the bias of how vivid the memories are, due to the nature of certain events (Bazerman & Moore, 2013. p. 35). Another bias that is considered in the availability heuristic, is how recent an event occurred. Recent events can be easier recalled than events that occurred long ago, based on how fresh, or, recent, the memory occurred. This bias can be seen in-action when tending to make decisions which are based on familiarity, or based on a comfort zone, or comfort level (Hayibor, et. al., 2009). The Representative Heuristic There are five bias categories to consider when discussing the representative heuristic. First, insensitivity to base rates, occurs when statistics of likelihood of something happening, are ignored, or disregarded. Bazerman and Moore (2013. p. 38) provide an excellent example of how the bias of insensitivity of bates rates can affect decisions, such as a woman basing her decision to have a child, based on the chance of women her age, giving birth to a child with Down’s Syndrome. Second, insensitivity to sample size is the next bias considered in this heuristic. This bias occurs when a smaller sample size, versus a larger sample size, is misconstrued, twisting the validity of the statistic. The bias of misconceptions of chance occurs when people do not understand that chance is just that: a chance; random. There is no way to predict a chance. The bias of regression to the mean occurs when assuming that, things will lean toward the average of outcomes, without giving consideration to the possibility of an other-than-average outcome, occurring. An example of this is when people assume that the day will be normal, like any other. While this may be true, the majority of the time, sometimes, days become largely outside the normal. Finally, when assuming that joined variables will occur, versus a single consideration, the conjunction fallacy bias, is affecting a decision. The Confirmation Heuristic There are four bias categories within the confirmation heuristic: confirmation trap, anchoring, conjunctive and disjunctive events, and also, hindsight and the curse of knowledge, biases (Bazerman & Moore, 2013. p. 46). The confirmation trap occurs when leaning on, or giving more attention or highlight to, references that confirm what the decision-maker prefers, to bolster their own opinion, or to confirm that their decision is the right one. Next, anchoring occurs when, sticking to one piece of information as the starting point for making a decision, without regard for the validity of the information. Overestimation of combined events, and underestimation of singular events or details is what happens with the conjunctive and disjunctive events bias. Finally, the bias of hindsight and curse of knowledge refers to the inability to ignore what we already know, based on past experience.