6 - Perception and Decision Making

• Perception is a process by which individuals organize and interpret their

  sensory impressions in order to give meaning to their environment.
• A number of factors operate to shape and sometimes distort perception. These factors can reside in the perceiver; in the object, or target, being perceived; or in the context of the situation in which the perception is made.
• Attribution theory tries to explain the ways in which we judge people

  differently, depending on the meaning we attribute to a given behavior. It suggests that when we observe an individual’s behavior, we attempt to determine whether it was internally or externally caused.
• Internally caused behaviors are those we believe to be under the personal control of the individual. Externally caused behavior is what we imagine the situation forced the individual to do.
• Distinctiveness refers to whether an individual displays different behaviors in different situations.
• If everyone who faces a similar situation responds in the same way, we can say the behavior shows consensus.
• It someone shows consistency in their actions. If they respond the same way over time.
• The fundamental attribution error explains why tend to underestimate the influence of external factors and overestimate the influence of internal or personal factors.
• People also tend to attribute ambiguous information as relatively flattering and accept positive feedback while rejecting negative feedback. This is the self-serving bias.
• Selective Perception is the tendency to selectively interpret what one sees on the basis of one’s interests, background, experience, and attitudes.
• The halo effect is the tendency to draw a general impression about an individual on the basis of a single characteristic.
• Contrast Effect is evaluation of a person’s characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.
• Stereotyping is when we judge someone on the basis of our perception of the group to which he or she belongs.
• The Self-fulfilling Prophecy is a situation in which a person inaccurately perceives a second person, and the resulting expectations cause the second person to behave in ways consistent with the original perception.
• Rational Decision-Making Model is a decision-making model that describes how individuals should behave in order to maximize some outcome.
• Rational is characterized by making consistent, value-maximizing choices within specified constraints.
• Bounded rationality is a process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.
• Intuitive Decision Making An unconscious process created out of distilled experience.
• The anchoring bias is a tendency to fixate on initial information and fail to adequately adjust for subsequent information.
• Confirmation Bias is the tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments.
• Availability Bias is the tendency for people to base their judgments on information that is readily available to them.
• Escalation of commitment refers to staying with a decision even when there is clear evidence it’s wrong.
• Randomness Error is the tendency of individuals to believe that they can predict the outcome of random events.
• Risk Aversion is the tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.
• Hindsight Bias The tendency to believe falsely, after an outcome of an event is actually known, that one would have accurately predicted that outcome.
• Utilitarianism which proposes making decisions solely on the basis of their outcomes, ideally to provide the greatest good for the greatest number.
• Whistle-blowers Individuals who report unethical practices by their employer to outsiders.
• Creativity is the ability to produce novel and useful ideas.
• The Three-Component Model of creativity refers to the proposition that individual creativity requires expertise, creative thinking skills, and intrinsic task motivation.