Business Case Study of Earth Baby Inc

He analysis conformation bias, hindsight bias, self-serving bias, and other types. When talking about conformation bias McRaney analysis that we have constructed our thoughts and opinions based on information we have accumulated based on our beliefs, while ignoring what the information against other opinions. A form of conformation bias that McRaney uses in page twenty-seven is: When you talk about a movie you haven’t seen in a long time and all of a sudden you are surrounded by information of said movie, you believe that fate is trying to tell you something. In reality conformation bias is occurring. You are have noticed more information about the movie because you have dismissed any other information. We seek out information that only enhances our beliefs and discriminates against the facts. Hindsight bias is relatable because we look at newfound information and speculate that we had already known it all along. Hindsight bias isn’t necessarily good because we have tendency to always wanting to be right, so after learning something new we edit our memories so we seem more factual than what we really are. McRaney states on page thirty-three that studies are the best way to demonstrate hindsight bias for researchers. Researchers can write a false statement in an article and we manufacture this information as our truth. Another form of bias McRaney talked about was self-serving bias. Self-serving bias

Two phenomena- hindsight bias and judgmental overconfidence- illustrate why we can’t rely solely on intuition and common sense.

C. (1988). Outcome bias in decision evaluation. Journal of Personality and Social Psychology, 54, 569-579.

Consider an example of a very hungry shopper (forgot to have lunch) went to the grocery store to d his weekly shopping. If his present state of hunger provokes him to buy a large dinner portion for consumption on the day later in the week when he will eat lunch in his office, then he had made an error in predicting the future outcome that has led to a bad choice. His outcome was labelled as ‘projection bias’ since the shopper was projecting his current mental state onto a future one. The projection bias entails violation of utility maximization.

Decision-making is always critical in people’s day-to-day lives. Individuals have to make choices between the very many options they have at their disposal. In doing so, sound judgement is needed, accompanied by much sobriety (Fay, & Montague, 2014). However, in trying to make sound decisions people always base their opinions on certain reference points. In fact, psychologists have generated much data, which shows that people rely so much on the pieces of information that they get to the extent that their judgement is affected. This usually presents the challenge of not making the best decision (Kansal & Sing, 2015).

Most studies done by Gilbert tries to establish the links between decision making, prediction, and well-being. The common assumption that one would be happier with an option of changing their minds over a decision than the fact remains that they would be happier with closure is challenged. All forecasting mistakes do not lead to similar results but their effect on ones well-being is the same.

Hammond, et al., (2013) suggest the effects of being biases could be reduce by using the proper tools, grasping the relevant facts, knowing if the decision maker judgment is intentionally clouded, and disciple your own experience, knowledge and ability to make the right

One of the biases that have been proposed by Kahneman and Tversky, and researched a great deal is the Availability bias. Availability bias is the concept of giving first choice to events and information because they are often more recent or giving preference to events, observed personally. Senior managers and decision makers are often victims of availability bias. Availability bias occurs when decision makers estimate the probability of outcome based on how prevalent the outcome appears in their lives (Pompian, 2011)

Present bias is when something is offered to a person on that day that person is more willing to go for it if it were offered for more the next. Even if the

In a market with a vast amount of competitors offering similar products, it is vital that competitors stay at the front of the market. In order to do this, companies, such as Blue Nile, must increase globalization efforts. As the market shifts worldwide, so must companies. Blue Nile, for example, has recently seen success in the worldwide market, although international profits only make up 13% of revenue. Also, companies must offer reliable customer service, such as Blue Nile offers. Along with reliable customer service, online competitors must focus on reliable shipping, lowering costs when applicable. Finally, marketing efforts must be vamped to ramp up customer traffic and build larger customer bases.

hindsight bias. Hindsight bias is defined as people claiming they had known the answers or

Hindsight Bias is also known as I knew-it- all- along effect, after the event has occurred to see the events as having been predictable. Therefore we often tend to say that we knew the answer on the test even though we gave the wrong answer. For example, when I went to my very first job interview I wrote and memorized the story about my self. Even though I knew exactly how I would answer that question when the question came out on the interview I’ve answered it completely differently. Of course I failed the interview and was angry on myself, but it was too late to complain. Another example of hindsight bias in my life was the decision about my education. When I just moved to the United States I wanted to have fun with my friends and work as

Faced with the imperfectability of decision making, researchers have sought to achieve an optimal way where people can make decisions if not perfect, at least that will deliver a better outcome. Whether it is a manager trying to hire people, a nurse/doctor trying to make a clinical decision, and or a lay person trying to decide what to eat for lunch we all decide in some shape way or form. One of the ways decision making can be affected is through cognitive biases. In general term, bias refers to “an inclination or prejudice for or against one person or group, especially in a way considered to be unfair” (Oxford English Dictionary). These inclinations are mostly driven

“A word of scandal spreads like a spot of oil.” As the old saying goes, negative events always have a higher impact than positive events. This phenomenon, referred as the negativity bias (Baumeister et al. 2001; Rozin and Royzman 2001), is ubiquitous in our daily life. Ill news travels faster than good ones (Basu 1997). Negative feedback have a higher impact than positive feedback (Basuroy et al. 2003, Chevalier and Mayzlin 2006). And negative experiences are easier to recall (Baumeister et al. 2001, Huang et al. 2014). Indeed, negativity bias exists in different ways and it has been identified as a cognitive bias that is persistent and difficult to correct. The consequences of the negativity bias, which is obvious that people are exposed to more negative information, become more conservative (Basu 1997) and may end with sub-optimal judgments or decisions. It is notable that the literature has attempted to explore the possible accounts for negativity bias (Baumeister et al. 2001; Rozin and Royzman 2001; Taylor 1991; Fiske 1980; Peeters and Czapinski 1990). The literature has also established the effect of information technologies on different decision biases. In general, information technologies could alleviate decision biases effectively. Previous research have shown that IT can mitigate the sunk cost effect bias (Herrmann et al. 2015), anchoring and adjustment bias (George et al. 2000), base rate bias (Roy and Lerch 1996), and the first impression bias (Lim et al. 2000).

(Lewicki, 2010, p. 585) Fontaine and Gaudin did not prepared to negotiate the full contract. They did not anticipate nor prepare to resolve additional issues. Due to their inexperience, Fontaine and Gaudin were not the correct pairing to conduct the renegotiation, as well, they did not have decision making authority. They had to contact senior level management in order to reach a final agreement. This delay extended the negotiation timeline. Adding to the already stressful situation, the prospect of losing Reliant as a consistent client prosed a potential major issue, especially relating to supply as it would be difficult to identify another client to fill the former demand level. Also, Pacific senior leaders delayed their decision to expand into PVC products, over a year. This delay created uncertainty with the forecast for VCM and derivate products, which had a negative marketing impact for one of the top essential products. Also, contributing to the list of weaknesses, Fontaine’s definition of a successful negotiation differed from the corporate office, in that, he linked a successful negotiation outcome to keeping Reliant as a client by extending the current terms of the contract, solely. However, just as important, Fontaine neglected to take into account all the other potential issues or points of