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In this unit, you learned about the different biases in decision-making. For this assignment, you will compose an essay that examines these biases. In your essay, briefly describe each of the three general heuristics covered in Chapter 3 in the textbook. Then, pick one or more of the three heuristics, and describe an original decision-making scenario that conveys how the heuristic and associated bias(es) played a part in the outcome. Explain how the biases could have been overcome to improve the decision.
This scenario can be real or imagined, and it can be about personal or business decision-making events. You should not use the scenarios or examples given in the textbook. Be sure to use what you have learned about the heuristics and biases to create your scenario.
In your essay, include both an introductory paragraph with a topic sentence and a conclusion. Your essay must be a minimum of three pages in length, and it must include at least two references, one of which must be the textbook and one of which must be another academic source. Any information from a source must be cited and referenced in APA format.
The three general heuristics are summarized below:
*Biases Emanating from the Availability Heuristic
1. Ease of recall
Individuals judge events that are more easily recalled from memory, based on vividness or recency, to be more numerous than events of equal frequency whose instances are less easily recalled.
Individuals are biased in their assessments of the frequency of events based on how their memory structures affect the search process.
*Biases Emanating from the Representativeness Heuristic
3. Insensitivity to base rates
4. Insensitivity to sample size
5. Misconceptions of chance
6. Regression to the mean 7. The conjunction fallacy
When assessing the likelihood of events, individuals tend to ignore base rates if any other descriptive information is provided—even if it is irrelevant.
When assessing the reliability of sample information, individuals frequently fail to appreciate the role of sample size.
Individuals expect that a sequence of data generated by a random process will look “random,” even when the sequence is too short for those expectations to be statistically valid.
Individuals tend to ignore the fact that extreme events tend to regress to the mean on subsequent trials.
Individuals falsely judge that conjunctions (two events co- occurring) are more probable than a more global set of occurrences of which the conjunction is a subset.
*Biases Emanating from the Confirmation Heuristic
8. The confirmation trap 9. Anchoring
10. Conjunctive and disjunctive events bias
11. Hindsight and the curse of knowledge
Individuals tend to seek confirmatory information for what they think is true and fail to search for disconfirmatory evidence.
Individuals make estimates for values based upon an initial value (derived from past events, random assignment, or whatever information is available) and typically make insufficient adjustments from that anchor when establishing a final value.
Individuals exhibit a bias toward overestimating the probability of conjunctive events and underestimating the probability of disjunctive events.
After finding out whether or not an event occurred, individuals tend to overestimate the degree to which they would have predicted the correct outcome. Furthermore, individuals fail to ignore information they possess that others do not when predicting others’ behavior.
Individuals tend to be overconfident of the correctness of their judgments, especially when answering difficult questions.