Chapter 5
Perception and Individual Decision Making
I. Some basic concepts in perception
II.������� Kelley's attribution theory
������� Consensus
������� Consistency
������� Distinctiveness
III.������� Attribution biases
������� Fundamental attribution error
������� Actor-observer effect
������� Self-serving bias
������� Selective perception
������� Projection
������� Stereotyping
������� Halo effect
������� Self-fulfilling prophecy
IV. Individual decision making
������� Decision making models
Heuristics and biases in judgment and decision making
I. Some basic concepts in perception
Perceiver, target, situation
� Disposition:� a quality or trait that distinguishes one person or group from another.
� Attribution:� an inference about the cause of a person�s action.� (perceived cause)
� Internal attribution:� an inference that a person�s behavior is caused by a personal disposition
� External attribution:� an inference that a person�s behavior is caused by an environmental or situational factor
II.������� Kelley's attribution theory
������� Consensus:� the extent to which others react in the same
������� ������� manner to some stimulus or event as the person we � ������� are considering
������� Consistency:� the extent to which the person reacts to this ������� stimulus or event in the same way on other occasions
������� Distinctiveness:� the extent to which the person reacts in � ������� the same manner to other, different stimuli or events
How to make attributions?
Consensus������� Consistency������� Distinctiveness�� Attribution����� � �����
� High����� ������� � High������� � High� ------->�� External
� Low������ ������� � High������� � Low�� ------->�� Internal
III.������� Attribution biases
� Fundamental attribution error:� the tendency to explain others' actions in terms of dispositional (internal) rather than situational (external) causes.
� Actor-observer effect:� the tendency to attribute our own behavior to situational causes but that of others to internal ones.
� Self-serving bias:� the tendency to take credit for positive behaviors but to blame negative ones on external causes.
� Selective perception:� people selectively interpret what they see based on their interests, background, experience, and attitudes.
� Projection:� attributing one's own characteristics to other people.
� Stereotyping:� judging someone on the basis of one's perception of the group to which that person belongs
� Halo effect:� drawing a general impression about an individual based on a single characteristic.
� Self-fulfilling prophecy:� a two-phase process
(1) an individual defines a situation incorrectly;
(2) her subsequent actions (prompted by the definition) cause the originally incorrect conception to become reality
IV.������� Individual Decision Making
������� A.������� Decision making models
������� � 1)������� The optimizing model
������� Assumptions: rationality
������� ������� People are rational, goal-oriented; they have clear ������� and constant preferences;� all options are known, and final choice will maximize the outcome
������� 6 steps:������� Ascertain the need for a decision
��������������� ������� Identify the decision criteria
��������������� ������� Allocate weights to the criteria
��������������� ������� Develop the alternatives
��������������� ������� Evaluate the alternatives
��������������� ������� Select the best alternative
������� � 2)������� The satisficing model
������� Assumption:� bounded rationality
������� ������� People make decisions by constructing simplified ������� models that extract the essential features from problems ������� without capturing all their complexity.
B.� Heuristics and biases in decision making
������� (Kahnman & Tversky, 1970s--)
� 1)������� Representativeness heuristic:� the more similar an ������� ������� individual is to a typical members of a given group, ���� ������� the more likely he or she is to belong to that group.� ��� ������� Generally, it refers to the phenomenon that � ������� probabilities are evaluated by the degree to which A � ������� is the representative of B, i.e., by the degree to ������� ������� which A resembles B.
� 2)������� Availability:� a judgmental heuristic in which people ��� ������� assess the frequency of a class or the probability of an ������� event by the ease with which instances or occurrences can ������� be brought to mind.
� 3)������� Anchoring:� different starting points yield different ������� estimates, which are biased toward the initial value.� ��� ������� It occurs when (a) there is a reference point or (b)� ������� estimate is based on the result of some incomplete ���� ������� computation.
4) Framing:� the way questions are framed influences decisions
5) Nonrational escalation of commitment: refers to the tendency to bias decisions by one�s past actions, particularly after receiving negative feedback about such actions.
Understanding Behavior in Escalation Situations
Barry Staw and Jerry Ross
Escalation of commitment ��������� ��������� The sunk cost effect
Psychology of entrapment�� ��������� The too-much-invested-to-quit syndrome
Determinants
Project determinants:
� whether a setback is judged to be due to a permanent or temporary problem
� whether further investment is likely to b efficacious
� how large a goal or payoff may result from continued investment
� future expenditures or costs necessary to achieve a project�s payoff
� the number of times previous commitments have failed to yield returns
Psychological determinants:
� framing effects
� self-justification biases
� confirmation trap
Social determinants:
� face-saving
� external binding (attribution bias)
Organizational determinants:
� institutional inertia
� politics
� organizational image or identity