Subject category:
Strategy and General Management
Published by:
Rotman Management Magazine
Abstract
Even with impressively large data sets and the best analytics tools, we are still vulnerable to a range of decision-making pitfalls, especially when information overload leads us to take shortcuts in reasoning. As a result, in some instances, data and analytics actually make matters worse. The authors show that leaders need to be aware of three common data-related decision making pitfalls: the confirmation trap, the over-confidence trap and the over-fitting trap. They describe each in detail and provide practical tips for overcoming each type of bias.
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Abstract
Even with impressively large data sets and the best analytics tools, we are still vulnerable to a range of decision-making pitfalls, especially when information overload leads us to take shortcuts in reasoning. As a result, in some instances, data and analytics actually make matters worse. The authors show that leaders need to be aware of three common data-related decision making pitfalls: the confirmation trap, the over-confidence trap and the over-fitting trap. They describe each in detail and provide practical tips for overcoming each type of bias.