Understanding Decision-Making Biases

This assignment delves into the realm of decision-making biases, examining how cognitive shortcuts like heuristics, anchoring effects, and confirmation bias can lead to inaccurate judgments. It highlights the importance of recognizing these biases and implementing strategies to minimize their influence, ultimately promoting more reliable and effective decision-making processes.

Running Head: DECISION MAKING 1
Decision Making
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Table of Contents
Introduction......................................................................................................................................3
Confirmation Bias............................................................................................................................3
Anchoring Bias................................................................................................................................4
Heuristic Bias...................................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................8

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Introduction
Decision making is a vital process in daily lives of people including professionals,
children, and parents. The outcome consequence of this process is squarely dependable on the
mode employed. Information availability and problem framing are the major factors impacting
on the process. Decision making is reliant upon several concepts which include anchoring bias,
confirmation bias, and availability heuristic, among many others (Sharot, 2011). Before making
decisions, managers ought to carefully analyze the situation at hand for the decision-making
outcome. This is important to handle possible flaws in the results of the decisions which are
often wired in the decision making process. It is critical that the decision maker establishes an
environment of friendliness and trust through connecting emotionally and intellectually to the
parties involved (Parkin, 2013). Therefore, such measures will enhance the achievement of the
desired outcome.
Confirmation Bias
Leaders seek for information that supports their instincts and positions and despise
information that is not consistent with it. Confirmation bias is a concept of decision-making that
makes people filter for only information they want and makes decision basing on it. Further, the
decision maker will support the result or product but negate any information contradicting it. The
concept can also be viewed on the lenses of values and facts in that any data that contradicts the
values are ignored, but information that is consistent with it is supported and upheld. Briefly, the

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concept will solicit for information that supports the existing position of the individual emerging
as discriminatory (Frost, Casey, Griffin, Raymundo, Farrell & Carrigan, 2015).
A scenario of the confirmation bias is the reasoning of the racist or religious group.
Racist and people in religion tend to confirm the position taken by their group regardless of the
common argument. Example, the Christians will conclude that Muslim religion propagates
terrorism through their radical teaching and they will support their position with information
available with them (Baack, Dow, Parente & Bacon, 2015).
The element of confirmation bias in this scenario emerges because the argument is
anchored on one's convictions and has a pre-determined conclusion. The conviction level is the
measure or evaluation degree for this kind of bias. Further, the individual arguing is interested
and seeks for information only consistent with their position rather than being open-minded and
analyze and synthesize the whole piece of information (Keltner & Lerner, 2010).
Some of the strategies to address the confirmation bias include information seeking. In
the scenario, religious parties should seek information on the other before making any judgment.
Insufficient information brings about confirmation bias in decision-making. Also, a strategy to
avoid bias, people avoid being driven by motives and rather consider making decisions basing on
the existing facts. In the scenario, the religious groups should seek information on the other, and
avoid making reason-driven and resolve to be moved by the prevailing truth.
Anchoring Bias

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Anchoring bias is the practice of arriving at a conclusion based on prior gained
information in the process of decision-making. The decision maker consumes the first
impression and intelligence giving it misappropriate weight and makes it the pillar of their
verdict and direction in any situation (Brunton, Botvinick & Brody, 2013). Anchoring can
misguide the decision maker by relying on the inadequate and incomplete information.
A scenario of anchoring bias is in the business world, where the players tend to overly
rely on past trends to predict and plan for the future business activities. Despite the usefulness
and importance, this might present to the firm people; they tend to ignore other factors including
environmental, political and social factors that might be of consequence to their planning
(Bollen, Mao & Pepe, 2011).
In this scenario, the level of biases can be measured by the extent by which a potential
buyer fall into the seller's trap depending on the anchoring concept that they have received. The
buyer will base their negotiations on the starting price as indicated on the price sticker a move
that will affect their abilities to do an in-depth consultation to achieve the real value for their
money. The retailer starting price will dictate their counter-offers which many times tend to have
close margins. The buyer is consequently misguided by focusing on one element and thus ending
up making errors and mistakes for not considering other factors or variables.
Some of the strategies to overcome the bias in this scenario include the willingness of the
potential buyer to seek more information before making the purchase decision. First impressions
and the information from one source may not be accurate, and thus, there is need to gather more
information from a variety of sources, including the personal evaluation of the product or

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service, and comparing it with the value that they will derive before making the purchase
decision. Therefore, this will address and improve the decision outcomes Lelieveld, Dijk &
Kleef, 2013).
Heuristic Bias
Decision making is a cognitive process that is affected by several factors known as
heuristics. This concept is anchored on memories and lasting impressions on the decision
maker's mind. Further, it can skew future decision-making efforts (Hertwig, Hoffrage & ABC
Research Group, 2013). The availability heuristic is the judgment adopted by an individual
basing on a previous experience ingrained in their minds. The decision maker relies on the
information that is readily available in their mind ignoring everything else. Examples include
post-decision evaluation and problem framing. An individual will overestimate or underestimate
the information they receive only to anchor their positions on other information available to them
(Sharot, Christoph & Dolan, 2011).
In an example scenario to depict heuristic bias, people might argue that smoking does not
gravely impact on one's health and justify their position by stating that a person they once knew
who smoke lived to 100 years. This person's judgment is informed by the memory of information
they have concerning a given topic or issue on the discussion. The heuristic bias can be measured
or evaluated by the level of knowledge and information that people have over the topic under
consideration.
Heuristic bias can be effectively handled through strategies where the decision maker
carefully examines all of their assumptions to ensure their memory does not unduly influence

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them. The remembrance level has a significant impact on the degree of heuristic bias. Thus, the
people involved need to know the assumptions of their information or memory shortcomings,
and this will reduce the biases and the improved process in the scenario (Todd & Gigerenzer,
2012).
Conclusion
In conclusion, unbiased decisions are critical in our daily life. Various decision-making
biases affect the reliability of decisions. This biases include heuristic bias, anchoring bias, and
the confirmation bias. It is important for people involved in decision-making to understand these
forms of bias and take appropriate strategies to manage the bias to increase the reliability and
accuracy of the decision-making outcome.

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References
Baack, D., Dow, D., Parente, R. & Bacon, D. (2015). The Confirmation bias in the individual-
level perceptions of the psychic distance: An experimental investigation. Journal of the
International Business Studies, 46(8), 938-959.
Bollen, J., Mao, H. & Pepe, A. (2011). Modeling public mood and the emotion: Twitter
sentiment and socio-economic phenomena. In Proceedings of the Fifth International
AAAI Conference on Weblogs and Social Media (ICWSM 2011). Barcelona, Spain
Brunton, B., Botvinick, M. & Brody, C. (April 2013). "Rats and humans can optimally
accumulate evidence for decision-making" Science. 340 (6128): 95–98.

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Frost, P., Casey, B., Griffin, K., Raymundo, L., Farrell, C. & Carrigan, R. (2015). Influence of
the Confirmation Bias on Memory and Source Monitoring. Journal of General
Psychology, 142(4), 238-252.
Hertwig, R., Hoffrage, U. & ABC Research Group. (2013). The Simple Heuristics in the social
world. New York: Oxford University Press.
Keltner, D. & Lerner, S. (2010). Emotion. In The handbook of the social psychology, ed. DT
Gilbert, ST Fiske, G Lindzey, pp. 317-52. New York, NY: Wiley
Lelieveld, G., Dijk, C & Kleef, G. (2013). Does communicating disappointment in negotiations
help or hurt? Solving an apparent inconsistency in the social-functional approach to the
emotions. Journal of Personality and Social Psychology 105: 605-20
Parkin, A. (2013). Essential Cognitive Psychology. Psychology Press.
Sharot, T. (2011). The optimism bias: a tour of an irrationally positive brain(1st ed.). New
York: Pantheon Books. ISBN 9780307378484.
Sharot, T., Christoph, W. & Dolan, R. (October 2011). "How unrealistic optimism is maintained
in the face of reality." Nature Neuroscience. 14 (11): 1475–1479. PMC 3204264
. PMID 21983684.
Todd, P. & Gigerenzer, G. (2012). Ecological rationality: Intelligence in the world. New York:
Oxford University Press.