Judgment in Managerial Decision Making, 8th Edition
October 2012, ©2013
Behavioral decision research provides many important insights into managerial behavior. From negotiation to investment decisions, the authors weave behavioral decision research into the organizational realm by examining judgment in a variety of managerial contexts.
Embedded with the latest research and theories, Managerial Decision Making 8th Edition gives students the opportunity to understand their own decision-making tendencies, learn strategies for overcoming cognitive biases, and become better decision makers.
Chapter 1 Introduction to Managerial Decision Making 1
The Anatomy of Decisions 1
System 1 and System 2 Thinking 3
The Bounds of Human Attention and Rationality 5
Introduction to Judgmental Heuristics 7
An Outline of Things to Come 10
Chapter 2 Overconfidence 14
The Mother of All Biases 14
Let's Hear it for Well-Calibrated Decision Making 28
Chapter 3 Common Biases 31
Biases Emanating from the Availability Heuristic 34
Biases Emanating from the Representativeness Heuristic 38
Biases Emanating from the Confirmation Heuristic 46
Integration and Commentary 57
Chapter 4 Bounded Awareness 60
Inattentional Blindness 65
Change Blindness 66
Focalism and the Focusing Illusion 67
Bounded Awareness in Groups 69
Bounded Awareness in Strategic Settings 71
Chapter 5 Framing and the Reversal of Preferences 82
Framing and the Irrationality of the Sum of Our Choices 85
We Like Certainty, Even Pseudocertainty 87
Framing and The Overselling of Insurance 90
What's It Worth to You? 91
The Value We Place on What We Own 93
Mental Accounting 94
Rebate/Bonus Framing 96
Joint-versus-Separate Preference Reversals 98
Conclusion and Integration 100
Chapter 6 Motivational and Emotional Influences on Decision Making 103
When Emotion and Cognition Collide 105
Self-Serving Reasoning 112
Emotional Influences on Decision Making 114
Chapter 7 The Escalation of Commitment 119
The Unilateral Escalation Paradigm 121
The Competitive Escalation Paradigm 123
Why Does Escalation Occur? 127
Chapter 8 Fairness and Ethics in Decision Making 132
Perceptions of Fairness 133
When We Resist "Unfair" Ultimatums 135
When We are Concerned about the Outcomes of Others 139
Why do Fairness Judgments Matter? 142
Bounded Ethicality 143
Overclaiming Credit 145
In-Group Favoritism 146
Implicit Attitudes 147
Indirectly Unethical Behavior 151
When Values Seem Sacred 152
The Psychology of Conflicts of Interest 154
Chapter 9 Common Investment Mistakes 160
The Psychology of Poor Investment Decisions 162
Active Trading 170
Action Steps 171
Chapter 10 Making Rational Decisions in Negotiations 175
A Decision-Analytic Approach to Negotiations 176
Claiming Value in Negotiation 179
Creating Value in Negotiation 180
The Tools of Value Creation 185
Summary and Critique 191
Chapter 11 Negotiator Cognition 193
The Mythical Fixed Pie of Negotiation 193
The Framing of Negotiator Judgment 195
Escalation of Conflict 196
Overestimating Your Value in Negotiation 198
Self-Serving Biases in Negotiation 200
Anchoring in Negotiation 203
Chapter 12 Improving Decision Making 206
Strategy 1: Use Decision-Analysis Tools 208
Strategy 2: Acquire Expertise 213
Strategy 3: Debias Your Judgment 216
Strategy 4: Reason Analogically 219
Strategy 5: Take an Outsider's View 222
Strategy 6: Understand Biases in Others 223
Strategy 7: Nudge Wiser and More Ethical Decisions 226
Subject Index 751
- Updated examples throughout the book feature current business problems and events and incorporate new, relevant research.
- New discussions and insight on topics such as “blind spots,” overconfidence, and ethical decision making.
- New content exploring recent controversies in the field of judgment and decision making.
- Exceptional Author Team: Max H. Bazerman is one of the leading theorists in negotiation and decision-making. Co-author, Don Moore, is currently an Associate Professor of Organizational Behavior of Carnegie Mellon University’s Tepper School of Business and founding director of the Center for Behavioral Decision Research.
- Most Relevant Research and Examples: The authors continue to incorporate the most relevant new research and examples using current business problems and events.
- Range of Organizational Contexts: Behavioral decision research is woven into the organizational realm by examining judgment in a variety of managerial contexts—giving students and instructors more examples of how to apply the theories of behavioral decision making.
- Numerous Hands-on Exercises and Examples: Derived from the authors' extensive executive training experience, these exercises and examples provide opportunities for critical thinking, application and in-class discussion.
- Strategies for Improving Decision Making: The authors provide theories, examples and practical strategies for understanding and changing personal decision-making biases and tendencies.
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