Common Biases and Errors in Decision Making Quiz

What is Overconfidence Bias?

• A preference for small achievements

• A tendency to underestimate risks

• A belief that one is more correct than they actually are

• A focus on initial information

Which bias involves sticking to a decision despite evidence that it is wrong?

• Hindsight Bias

• Escalation of Commitment

• Availability Bias

• Confirmation Bias

What does Anchoring Bias refer to?

• The inclination to seek out confirming evidence

• The tendency to rely on the first piece of information received

• The belief that past events were predictable

• The focus on immediate information

How does Confirmation Bias affect decision making?

• It encourages a balanced view of all evidence

• It leads to seeking information that supports existing beliefs

• It promotes risk-taking behavior

• It results in overestimating one's knowledge

What is a consequence of Availability Bias?

• Being overly cautious in decision making

• Overlooking less prominent but significant information

• Making decisions based on comprehensive data

• Relying on expert opinions

What is the main issue with Hindsight Bias?

• It encourages thorough analysis of events

• It leads to overconfidence in future predictions

• It reduces the impact of initial information

• It helps in learning from past mistakes

What does Risk Aversion imply about decision makers?

• They are willing to take calculated risks

• They prefer high-risk situations

• They avoid taking risks for minimal success

• They seek out new challenges

In the context of decision making, what does Randomness Error refer to?

• Using logical reasoning to solve problems

• Making decisions based on statistical analysis

• Creating meaning from random events based on myths

• Relying on historical data

How can managers avoid the pitfalls of Escalation of Commitment?

• By being consistent in their decisions

• By sticking to their original plans

• By recognizing when to change course

• By ignoring past failures

Which of the following best describes the impact of Overconfidence Bias on decision making?

• It leads to more accurate predictions

• It can result in poor decision making

• It encourages collaboration among team members

• It enhances critical thinking skills