Deck 19: Strategies for Improving Managerial Decision Making

Question 1

Events that have occurred frequently in the past are likely to happy again in the future.

Answer 1

True

Question 2

Statistically, when a manager considers more options, there is a greater chance of finding an optimal solution.

Answer 2

True

Question 3

The need for cognitive closure is both an individual personality-type variable and a can be driven by situational variables.

Answer 3

True

Question 4

The overconfident belief that a project will proceed smoothly is known as the planning fallacy.

Question 5

One reason people tend to underuse base rate information is that base rate is a sum statistic based on the occurrence of a single important event in the past.

Question 6

Preference reversals are more likely to occur when a decision maker focuses on costs or benefits unequally.

Question 7

Linear models can only deal with objective (rather than subjective) information.

Question 8

Research on the framing effect shows that focusing on costs leads decision makers to behave in a risk seeking
manner.

Question 9

Episternic seizing and freezing generally improves managerial decision making.

Question 10

Validity and reliability should be strongly considered when evaluating information quality.

Question 11

People use base rate information when the causal relevance of the information is apparent.

Question 12

Invalid information varies because of poor measurement even when the target does not change.

Question 13

"Bootstrapping" is the opposite oflinear modeling.

Question 14

Many fmns require their managers to justify and explain their judgments to a higher-ranking officer in the firm.

Question 15

Subjective linear modeling would be a good way to select which university to attend for a high school student.

Question 16

Research shows that people are very good predicting future events.

Question 17

Freezing refers to the tendency to attain cognitive closure quickly.

Question 18

Research on the framing effect shows that once options have been identified, managers tend to mainly focus on benefits and ignore costs.

Question 19

Decision makers must frequently make a difficult tradeoff between speed and accuracy.

Question 20

The "operations research perspective" suggests the best way to control product costs is to produce many units of the same component before making changes to the production process.

Question 21

Bayes's Theorem is closely related to anchoring-and-adjustment.

Question 22

In Bayes's Theorem, the likelihood ratio serves as a measure of the probability of a hypothesis being true.

Question 23

Once the options have been identified managers tend to focus on all, except:

A)costs
B)decision frame management
C)benefits
D)possible risky options
E)deadlines

Question 24

An event seems much more likely to occur if when a scenario related to that event is presented or imagined.

Question 25

The best defense against a scenario is to generate your own scenario leading to a different conclusion.

Question 26

The case of the U.S.automobile industry maintaining the status quo while the Japanese developed innovative new solutions to old problems is an example of:

A)openness to new frames
B)poor decision frame management
C)abandoning an operations research perspective
D)relying too heavily on Bayes Theorem
E)high need for cognitive closure

Question 27

Decision aids often cause managers decisions to be even more inconsistent.

Question 28

Intuition follows the mles of Bayes Theorem, which is why intuition is often a good decision tool.

Question 29

According to your readings, the Space Shuttle Challenger tragedy is an example of scenario thinking on the part of
NASA.

Question 30

Confidence decreases as insensitivity to omissions increases.

Question 31

Unrelated pieces of information converging on the same conclusion provide weak evidence for a conclusion.

Question 32

The pseudodiagnosticity effect contributes to the problem of overconfidence.

Question 33

Confidence increases as need for cognitive closure increases.

Question 34

Fault trees would not be helpful for the restaurant management industry due to the nature of the tool.

Question 35

The best way to overcome overconfidence is to focus intensely on one possibility or outcome.

Question 36

"Calibration" refers to the degree to which confidence matches scenario thinking.

Question 37

Fault trees help managers identify the source of a problem quickly.

Question 38

Objective linear models are also called fault tree models.

Question 39

Many managers are reluctant to use linear models.

Question 40

The degrees of correlation between two or more variables can be estimated accurately by such statistical measures as the chi-square test or the Spearman rank-order test.

Question 41

As the need for cognitive closure increases:

A)people consider more alternatives.
B)people consider larger amounts of information about each individual alternative.
C)people make snap or quick conclusions.
D)people become more sensitive to inconsistent evidence.
E)people exhibit lower levels of confidence with their decision.

Question 42

People sometimes base rate information because it is a statistic.

A)over use
B)misuse
C)1gnore
D)emphasize
E)over estimate

Question 43

When several independent or unrelated pieces of iuforrnation taken from a large data set poiut to the same conclusion, a manager should be concerned with:

A)reliability and confidence
B)accuracy and cost
C)speed and accuracy
D)seiziug and freezing
E)convergence and redundancy

Question 44

Advising managers to be sensitive to new information and to revise prior judgments in light of new information reduces the effects of which of the following heuristics?

A)Representativeness heuristic
B)Availability heuristic
C)Simulation heuristic
D)Anchoring-and-adjustment heuristic
E)Confrrmation bias

Question 45

The linear model is:

A)unsystematic compared to an actuarial model
B)used to graph ideal vectors
C)a decision aid
D)used only by banks
E)All of the above are correct.

Question 46

Confidence tends to increase as to omission (missing information) .

A)sensitivity; increases
B)insensitivity; increases
C)attention; decreases
D)calibration; increases
E)sensitivity; decreases

Question 47

is a desire for defmite knowledge, rather than ambiguity or confusion.

A)Judgment convergence
B)Need for cognition
C)Bayes theorem
D)Calibration theory
E)None of the above is correct.

Question 48

What is the root (or essence) of the planning fallacy?

A)Overconfidence
B)Unreliable information
C)Too much emphasis on the base rate
D)Complacency
E)Lack of confidence

Question 49

The Consumer Cost Perception Index is an economic indicator that has historically been inaccurate and has varied greatly due to poor measurement techniques.This measure is:

A)urneliable
B)invalid
C)insensitive to omission
D)actuarial
E)convergent

Question 50

Scenario thinking:

A)is harder to handle than statistical decision aids
B)leads to good predictions and judgments
C)increases the perceived likelihood of an event
D)increases manager productivity
E)All of the above are correct.

Question 51

The example discussed in your readings which explained how the Eurotunnel went over budget and past deadline is an example of:

A)a linear model
B)the planning fallacy
C)neglecting base rates
D)unfreezing
E)redundancy

Question 52

When you want to gain cognitive closure quickly, this is known as what component of need for cognitive closure?

A)Convergence
B)Seizing
C)Unfreezing
D)Freezing
E)Integrative complexity

Question 53

The decision aid involving the use of a list of categories of common difficulties for use in troubleshooting is known as:

A)an actuarial model
B)a subjective linear model
C)an objective linear model
D)a fault tree
E)a convergence model

Question 54

Subjective liuear models:

A)consistently outpetforrn unaided human judgments
B)rarely outpetforrn unaided human judgments
C)petforrn about the same as unaided human judgments
D)never outpetforrn unaided human judgment
E)The data are ambiguous regardiug unaided human judgments and liuear models

Question 55

Information that confounds measures of a target with measures of nontargets are:

A)unreliable
B)invalid
C)insensitive to omission
D)actuarial
E)convergent

Question 56

The base rate is a statistic based on:

A)a single significant event score
B)a distribution of event scores
C)a series of isolated events
D)a median event score
E)None of the above is correct.

Question 57

Taking books horne over a holiday expecting to do lots of work and doing nothing at all is an example of:

A)confidence
B)the planning fallacy
C)neglecting base rates
D)unfreezing
E)redundancy

Question 58

Focusing on leads decision makers to act .

A)costs; risk averse
B)benefits; risk seeking
C)losses; risk averse
D)benefits; risk averse
E)None of the above is correct.

Question 59

The decision aid involving the construction of a key list of inputs for a decision, importance weights for each input, and objective ratings of each input for each decision alternative is known as:

A)an actuarial model
B)an objective linear model
C)a subjective linear model
D)Both a and b are correct.
E)None of the above are correct.

Question 60

Which actions do not improve managerial judgment?

A)Unseizing
B)Seizing
C)Unfreezing
D)Considering a wider range of possibilities
E)All of the above improve managerial judgment.

Question 61

Explain the difference between "seizing" and "freezing."

Question 62

When can accountability improve decision making? When can it harm decision making?

Question 63

Why is a subjective linear model also called a "bootstrapping" model?

Question 64

Bayes's theorem:

A)de-emphasizes base rates
B)prevents confusion of the inverse
C)can frequently be duplicated by intuitive judgment
D)uses only a small amount of information to make its predictions
E)All of the above are correct.

Question 65

The degree to which confidence matches accuracy is known as:

A)omission neglect
B)calibration
C)convergence
D)redundancy
E)framing effect

Question 66

What is the outcome when managers focus mainly on benefits?

Question 67

How can a linear model improve decision making?

Question 68

What should always be the first step in managerial decision making?

Question 69

How does the need for cognitive closure influence decision making?

Question 70

What is the planning fallacy? Provide an example.

Question 71

What is the best way to reduce overconfidence?

Question 72

Which of the following is not a way in which Bayes's theorem can improve decision making?

A)Increasing attention to base rates
B)Reducing pseudodiagnostic thinking
C)Eliminating the confusion of the inverse fallacy
D)Helping decision makers adjust initial estimates with new information
E)All of the above are way in which Bayes's Theorem can improve decision making.

Question 73

Bayes's theorem is closely relate to what heuristic?

A)Anchoring-and-adjustment heuristic
B)Price/quality heuristic
C)Availability heuristic
D)Simulation heuristic
E)Contrast effect

Question 74

Distinguish between convergence and redundancy.