Path Dependence

Path dependence is a decision-making approach based on past behaviors and experiences, often maintaining the status quo. It is influenced by factors like ease of information access and financial implications. While useful, it can lead to cognitive bias if it prevents recognizing current conditions and new information. Understanding path dependence helps in identifying its impact on decision-making processes.

What is the primary focus of path dependence in decision-making?

• Exploring new methods

• Relying on past experiences

• Ignoring historical data

• Emphasizing future trends

Which of the following is a reason organizations might stick to path dependence?

• Abundance of new information

• Strong leadership support

• High cost of changing approaches

• Lack of historical data

What might hinder an organization from committing to change?

• Excessive authority

• Lack of authority or information

• Abundant resources

• Clear directives

How can path dependence become a cognitive bias?

• By eliminating past data

• By focusing on future possibilities

• By preventing the appreciation of new conditions

• By encouraging innovative thinking

What is a potential downside of relying too heavily on historical precedent?

• It encourages adaptability

• It fosters innovation

• It enhances decision-making

• It may ignore current conditions