Published by:
Harvard Business Publishing
Length: 3 pages
Abstract
Managers'' ability to take a purely rational approach to decision making is hampered by insufficient information about the problems themselves, the data available, and perceptions that inhibit managers'' ability to determine optimal choices. Our judgment is directed by a set of systematic biases, or heuristics. This article discusses the three broad heuristics--the availability heuristic, the representativeness heuristic, and anchoring and adjustment--and identifies the thirteen most common decision-making mistakes managers make.
About
Abstract
Managers'' ability to take a purely rational approach to decision making is hampered by insufficient information about the problems themselves, the data available, and perceptions that inhibit managers'' ability to determine optimal choices. Our judgment is directed by a set of systematic biases, or heuristics. This article discusses the three broad heuristics--the availability heuristic, the representativeness heuristic, and anchoring and adjustment--and identifies the thirteen most common decision-making mistakes managers make.