组织的经济学与管理学(英文)ch13-Biases-in-decision-making课件.ppt

1、Chapter 13Biases in decision makingGeorge HendrikseEconomics and Management of Organisations:Co-ordination,Motivation and Strategy Figure 13.2:Tendencies in decision making Emphasis in actual decision making Too much Too little Time Near future Distant future Decision making dimension Distance Small

2、 Large Result Success Failure Organisational measureschanging the costs and/or benefits of the choice possibilitieschanging the choice possibilitiesstructure the amount and nature of informationShort term focusCurrent costs and benefits receive a disproportional amount of attention in decision proce

3、sses.1.ProcrastinationPostpone-starting a healthy diet-starting a new project-killing a bad performing project-start studying for an examOrganisational responses pose a deadline for profitability punish admitting mistakes mildly allow credible excuses separate starting and finishing decisions job ro

4、tation(to limit overcommitment to project)Make results visible clear figures step-by-step plan2.ObedienceBefehl ist befehlMilgram experimentsA series of small,escalating concessions establishes an incredible obedience.3.MeliorationHerrnstein&Prelec(1992)People(and animals)have the tendency to focus

5、on todays costs and benefits of current choices,without taking future consequences of these choices into account.Shortsightedness Distance Interest/background Probability of certain events occurringLaw of small numbersPeople often exaggerate the representativeness of a small sample.Striking informat

6、ion gets too much weight in the decision process of people.Prospect theory Asymmetry between gains and losses Reference pointFramingThe choices/preferences of people are often not robust w.r.t.the way in which choice possibilities/alternatives are represented.Reference pointMost people are often mor

7、e sensitive to how the current situation differs from to a reference point,than to the actual characteristics of the situation.Two empirical observations1.Loss aversion.People value a small loss twice as much as a similar gain.2.Decreasing sensitivity.Marginal changes close to the reference point en

8、tail a larger change in utility than an identical marginal change far away from the reference point.How do you depict these observations in a figure?ValueProfitLossCumulative prospect theoryThree properties Relationship between MU and risk-aversion is abandoned Gain -Loss Loss aversion implies that

9、there is a reference point(0)Implication for behaviour from1.Loss aversion2.Decreasing sensitivity1.Loss aversion2*Gain=LossOrganisational change“Injustices have to be committed at once,then they are experienced less;and benefits have to be given little by little,then they taste better.”-Machiavelli

10、(1513)Costs at once becauseU(-1)+U(-1)+U(-1)=3U(-1)U(-3)Benefits little by little becauseU(3)U(1)+U(1)+U(1)Salary structureSmall annual raises are preferred above one-time jumps.Response to uncertaintyPeople will respond differently to gains than to losses.Figure 13.6:Gains and risk averse behaviour

11、LossGainReference point ValueValue certaintyValue uncertainty10050Figure 13.7:Losses and risk seeking behaviourLossGainValueValue certaintyValue uncertaintyO-50-1002.Decreasing sensitivityFramingA frame that gives the impression that losses are relatively small on the scale that is used,makes the th

12、e choice more attractive.Application:Money illusionPeople perceive a salary rise of 5%during a period of 12%inflation as less harmful than no raise during a period of 7%inflation.Figure 13.8:Gains far away from the reference point are less attractiveWinst WaardeNutO5712Governance implication of loss

13、 aversionIf preferences are determined by the(local)situation,then humans may be altruistic in organisation/families,and opportunistic in markets.This may be due to reference point situation dependent allocation of limited cognitive unitsImplicationIs the criticism of properly rights theory on TCE,i

14、.e.opportunism in markets and altruism in organisations,valid?Institutions mould,and are moulded by,human behaviour.Institutions determine human behaviourThey influence the way information is presented,which information is communicated,and how information is given sense.Human behaviour determines institutionsHumans form habits and routines.Institutions are durable and integrated sets of habits and routines.Criticism on incomplete contracting theoryOnly the causal effect of human behaviour on institutions is analysed.