Word Count : 600 words
The decision making is the process of choosing between alternative courses of action to achieve a desired outcome or goal. During this process, there are certain pitfalls. Most substantial ones are heuristics (a.k.a. biases) that inhibit the quality of decisions.
Recognizing the bias is the key to excellent decision making. During our lectures we have identified and learnt about the most significant bias types, including confirmation, framing, overestimation. There are other forms of biases, many of which are closely related to the ones we have covered during our lectures.
There are debiasing techniques available for enhanced decision making. In this assignment we will
consider a very simple 2-step framework that (i) can benefit from bias, and (ii) can overcome when it is deemed necessary.
To this end, your task is to come up with a hypothetical or real decision-making scenario. Address the following:
I. Decision-Specific Information
a. Your role: What is the role of the decision maker (hypothetical or real)
b. Goals: When making decisions, people tend to consider their personal values and how the decision aligns with their goals. Write down one sentence summarizing the goal.
c. Information: The quality and quantity of information available can greatly impact decision making. Having accurate, relevant, and timely information can help ensure that decisions are well-informed and effective.
d. Emotional state: Emotions can also influence decision making. Fear, anger, and other emotions can affect our judgment and lead us to make decisions that we might not make in a calmer state.
e. Risk tolerance: People have different levels of risk tolerance, which can influence their decision making. Some people are risk-averse and tend to avoid decisions that carry a high degree of risk, while others are risk-tolerant and are willing to take more chances.
What kind of risks are at stake regarding this decision?
f. Potential cognitive biases to be debiased: These biases can include things like confirmation bias, where we tend to seek out information that confirms our existing beliefs, and availability bias, where we rely too heavily on the most easily available information.
g. Time constraints: Time constraints can also impact decision making. When there is a limited amount of time to make a decision, people may rely on heuristics or other shortcuts to make a decision quickly.
II. Leveraging System 1 thinking: You can nudge yourself and others towards better behavior and enhanced decision making by triggering particular emotions through exploiting biases.
III. Implement System 2 thinking: Introduce changes and implement systems that encourages you and others to engage in deeper analysis and more rational thinking.
Write a report addressing all these 3 steps. Do not exceed 600 words. Your report should include and indicate all of the steps outlined above. (i.e. I, I-a, I-b etc.)