Judgment in Managerial Decision Making

Behavioral decision research provides many important insights into managerial behavior. From negotiation to investment decisions, the authors weave behavioral decision research into the organizational realm by examining judgment in a variety of managerial contexts. Embedded with the latest research and theories, Managerial Decision Making  8th Edition gives students the opportunity to understand their own decision-making tendencies, learn strategies for overcoming cognitive biases, and become better decision makers.

Table of Contents:
Chapter 1 Introduction to Managerial Decision Making 1 The Anatomy of Decisions 1 System 1 and System 2 Thinking 3 The Bounds of Human Attention and Rationality 5 Introduction to Judgmental Heuristics 7 An Outline of Things to Come 10 Chapter 2 Overconfidence 14 The Mother of All Biases 14 Overprecision 16 Overestimation 22 Overplacement 26 Let's Hear it for Well-Calibrated Decision Making 28 Chapter 3 Common Biases 31 Biases Emanating from the Availability Heuristic 34 Biases Emanating from the Representativeness Heuristic 38 Biases Emanating from the Confirmation Heuristic 46 Integration and Commentary 57 Chapter 4 Bounded Awareness 60 Inattentional Blindness 65 Change Blindness 66 Focalism and the Focusing Illusion 67 Bounded Awareness in Groups 69 Bounded Awareness in Strategic Settings 71 Discussion 81 Chapter 5 Framing and the Reversal of Preferences 82 Framing and the Irrationality of the Sum of Our Choices 85 We Like Certainty, Even Pseudocertainty 87 Framing and The Overselling of Insurance 90 What's It Worth to You? 91 The Value We Place on What We Own 93 Mental Accounting 94 Rebate/Bonus Framing 96 Joint-versus-Separate Preference Reversals 98 Conclusion and Integration 100 Chapter 6 Motivational and Emotional Influences on Decision Making 103 When Emotion and Cognition Collide 105 Self-Serving Reasoning 112 Emotional Influences on Decision Making 114 Summary 117 Chapter 7 The Escalation of Commitment 119 The Unilateral Escalation Paradigm 121 The Competitive Escalation Paradigm 123 Why Does Escalation Occur? 127 Integration 131 Chapter 8 Fairness and Ethics in Decision Making 132 Perceptions of Fairness 133 When We Resist "Unfair" Ultimatums 135 When We are Concerned about the Outcomes of Others 139 Why do Fairness Judgments Matter? 142 Bounded Ethicality 143 Overclaiming Credit 145 In-Group Favoritism 146 Implicit Attitudes 147 Indirectly Unethical Behavior 151 When Values Seem Sacred 152 The Psychology of Conflicts of Interest 154 Conclusion 158 Chapter 9 Common Investment Mistakes 160 The Psychology of Poor Investment Decisions 162 Active Trading 170 Action Steps 171 Chapter 10 Making Rational Decisions in Negotiations 175 A Decision-Analytic Approach to Negotiations 176 Claiming Value in Negotiation 179 Creating Value in Negotiation 180 The Tools of Value Creation 185 Summary and Critique 191 Chapter 11 Negotiator Cognition 193 The Mythical Fixed Pie of Negotiation 193 The Framing of Negotiator Judgment 195 Escalation of Conflict 196 Overestimating Your Value in Negotiation 198 Self-Serving Biases in Negotiation 200 Anchoring in Negotiation 203 Conclusions 205 Chapter 12 Improving Decision Making 206 Strategy 1: Use Decision-Analysis Tools 208 Strategy 2: Acquire Expertise 213 Strategy 3: Debias Your Judgment 216 Strategy 4: Reason Analogically 219 Strategy 5: Take an Outsider's View 222 Strategy 6: Understand Biases in Others 223 Strategy 7: Nudge Wiser and More Ethical Decisions 226 Conclusion 228 References 231 Index 261 Index 743 Subject Index 751

About the Author :
Max H. Bazerman is the Jesse Isidor Straus Professor of Business Administration at the Harvard Business School. In addition, Max is also formally affiliated with the Kennedy School of Government, the Psychology Department, and the Program on Negotiation at Harvard. He is the author or co-author of over 150 research articles and chapters, and the author of numerous other books. Professor Bazerman was named one of the top 30 authors, speakers, and teachers of management by Executive Excellence in each of their two most recent rankings. Don Moore is an Associate Professor of Organizational Behavior at Carnegie Mellon University's Tepper School of Business, and holder of the Carnegie Bosch Faculty Development chair. Don is also formally affiliated with CMU's Department of Social and Decision Sciences, and he is the founding director of the Center for Behavioral Decision Research. He received his Ph.D. in Organization Behavior from Northwestern University.