Common biases in decision making
In general there are three general heuristics namely availability, representative and confirmation heuristics. They encompass eleven specific biases.
Author: mudu.io
Cognitive bias
Economists claim individuals are rational decision makers. They collect a lot of information, examine all alternatives and make decisions that maximise personal satisfaction. However, we do not make decisions in…
The journey to authentic leadership
Development as a leader is not a straight line but a journey filled with many ups and downs as you progress to peak leadership.
What causes leaders to lose their way?
If motivations to lead are only power, prestige, and money, leaders risk being trapped by external gratification as the source of fulfilment.
5 derailed leaders archetypes
The five types are: Imposters, who lack self-awareness and self-esteem; Rationalisers, who deviate from their values; Glory seekers, who are motivated by seeking the world’s acclaim; Loners, who fail to…
Transformation from “I” to “We”
Leaders can unleash the power of their organisations when they motivate people to reach their full potential.
Self-awareness and self-acceptance
Self-awareness is the first element of emotional intelligence. EQ may be more important for authentic leaders than IQ.
Values, leadership principles and ethical boundaries
It is easy to get pulled off course. By knowing our ethical boundaries and testing values under pressure, we are able to get back on track.
What motivates you to be a leader?
The key to developing as an authentic leader is not eschewing your extrinsic motivations but balancing them with intrinsic motivations.
Multiple selves theory
Decision making is a cognitive process. Humans make errors because of motivational and emotional influences. Learn more about multiple selves here.
Hyperbolic discounting definition
Economic concept of discounting states that any choice that involves a trade off between current and future benefits should discount the future.
Self-interest bias definition
Perceptions and expectations are biased in self-serving manner. When presented with identical information, we perceive situation in different ways.
How emotions affect decision making?
Specific emotions influence our decision making. This is an effect of positive and negative moods. Good or bad mood results in more biased judgements.
Three main types of overconfidence
Overconfidence effects are some of the most potent, pervasive and pernicious of any biases. It is blamed for wars, stock market bubbles, strikes, lawsuits, bankruptcy, failure of merges and acquisitions,…
Overprecision causes and consequences
Tendency to be sure judgements and decisions are accurate, uninterested in testing assumptions and dismissive evidence that suggests we might be wrong.
Overestimation meaning
Tendency to think that we are better, smarter, faster, more capable, more attractive, more popular (and so on) than we actually are.
Overplacement bias
Tendency to think we rank higher than others on certain dimensions, particularly in competitive contexts.
Heuristic definition
Individuals rely on rules of thumb (heuristics) to lessen the information processing demands of making decisions.
Availability heuristic
The inferences we make about event commonness based on the ease with which we can remember instances of that event.
Retrievability bias
We are better at retrieving some subjects from our memory than other things. Individuals base judgement on commonality and easier base strategies.
Base rate fallacy
People tend to ignore background information relevant to the problem such as base rate. We tend to assume that causes and consequences are related.
Gambler’s fallacy
Simple statistics claims each event in a sequence is equally likely to occur. But individuals believe random and non-random events will balance out.
Small sample size fallacy
Simple statistics state that we are more likely to observe an unusual event in a small sample compared to a large one. Learn more.
Regression to mean definition and example
People predict they will repeat their previous performance exactly. Statistics tells us that extreme performance is likely to regress to the mean over time.
Emotionally drained relationship
These relationships can be very destructive. They slowly drain off our energy, frustrate us, and generally make for an unhealthy negative environment.
Healthy relationships
They contribute to your overall well-being and sense of feeling valued. Here, people genuinely like and admire many of the qualities the other has.
How to build a better relationship?
Several skills are involved in building relationships that are satisfying and nurturing. You must be prepared to make some effort to keep them going.
Reasons for new product failure
The failure of a product idea to be developed into a product is not necessarily a bad thing. It may save the company enormous sums of money.
Organisational structures and cross-functional teams
The use of cross-functional teams increases creativity in a new product development, leading to shorter development time and higher product innovation.
New product launch
Most new products are improvements or minor line extensions and may attract almost no attention. Other products will receive extensive coverage.