Analysis of Six Decision-Making Traps in Business and Leadership

This report provides an analysis of the six decision-making traps discussed in the article, "The Hidden Traps in Decision Making". It begins by defining and explaining the anchoring trap, status quo trap, sunk cost trap, confirming evidence trap, framing trap, and estimating and forecasting trap. Each trap is described in detail, highlighting how they can negatively influence business decisions. Furthermore, the report provides examples to illustrate these traps in action, such as the anchoring trap in pricing and the framing trap in consumer choices. The analysis emphasizes the importance of recognizing these biases to make more informed and effective leadership decisions. The report concludes by referencing relevant literature to support the analysis.

Running head: BUSINESS AND LEADERSHIP
Business and Leadership
Name of the Student
Name of the University
Author note

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Analysis of the Six Traps in Article
The six kinds of traps which have been used in the article are described in the following
manner:
Firstly, the Anchoring Trap is the situation wherein while considering the decision, the
mind will be providing with disproportionate weight to the first and foremost information which
it receives. In business context, the common anchor is considered to be the past event or trend
which can be taking place. The respective trap helps the manager in viewing the problem from
various perspectives rather than sticking to the single point (Hammond, Keeney and Raiffa
1999).
Status Quo Trap is the other situation wherein there is inclusion of bias which will be
influencing choices which are made by the different individuals. In the business perspective,
wherein the commission can be considered to be the sin, it will be punished in a severe manner
and in such scenario; the Status Quo Trap holds the magnetic position (Hammond, Keeney and
Raiffa 2006).
Sunk Cost Trap is the situation wherein it is considered to be the deep seated bias and it
is considered to be the tendency for making the different choices in such a manner which will be
justifying the decisions which have been taken in the past, even the latter may not be valid. In the
business prospect, it will be playing a vital role in making the conscious effort for setting aside
the sunk costs if any (Hammond, Keeney and Raiffa 1999).
Confirming Evidence Trap is the other situation wherein the different leaders will be
seeking out the different kinds of information which will be supporting the existing kind of
instinct or the point of the view and it will be avoiding the information which will be

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contradicting the same. From the same, it can be analyzed that the respective prospective will be
mainly focusing and creating high weight age on the supporting information and very less on the
conflicting kind of information (Hammond, Keeney and Raiffa 2006).
Framing Trap is the situation wherein the first step which is taken while making the
decisions is framing the questions and it is considered to be one of the dangerous steps as it will
be showcasing how the problem or the issue can be profoundly influence the different choices
which have been made.
Estimating and forecasting Trap is the last aspect wherein it has been noticed that there
is high level of opportunity as well as incentives included in maintaining the different records in
the perspective of the business of the forecasting abilities in a successful manner (Hammond,
Keeney and Raiffa 1999).
Analysis of Examples
Anchoring Trap- The main example of the anchoring trap or the bias is that when there
are two sets of dresses hanging in the shop, the first costs $1000 and the second costs $500, in
such scenario, as per the human nature, the customer will be seeing and checking the second
dress as there will be prone to see the second dress as the cheap one.
Framing Trap- In the respective scenario, the main aspect which is noticed that while
making a purchase, the different customers who are the ones purchasing are prone to make a
statement such as 90% fat free, as opposed to 10% fat, even though, the two options are same,

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References
Emiliani, M.L., 2006. Executive decision‐making traps and B2B online reverse auctions. Supply
Chain Management: An International Journal.
Hammond, J. S., Keeney, R. L., & Raiffa, H. (2006). The hidden traps in decision
making. Harvard business review, 84(1), 118.
Hammond, J.S., Keeney, R.L. and Raiffa, H., 1999. The hidden traps in decision
making. Clinical laboratory management review: official publication of the Clinical Laboratory
Management Association/CLMA, 13, pp.39-47.
Russo, J.E., Schoemaker, P.J. and Russo, E.J., 1989. Decision traps: Ten barriers to brilliant
decision-making and how to overcome them. New York, NY: Doubleday/Currency.