220 ReferencesThaler, R. H. (1985). Using mental accounting in a theory of purchasing behavior. Marketing Science,4, 12–13.Thaler, R. H. (1991). Quasi rational economics. New York: Russell Sage Foundation.Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3),183–206.Thaler, R. H. (2000). From homo economicus to homo sapiens. Journal of Economic Perspectives,14, 133–141.Thaler, R. H. (2004). Unrestricted teaching files, faculty website at University of Chicago Schoolof Business:http://gsb.uchicago.edu/fac/richard.thaler/Thaler, R. H., & Benartzi, S. (2004). Save more tomorrow: Using behavioral economics to increaseemployee saving. Journal of Political Economy, 112(1), S164–S187.Thaler, R. H., & DeBondt, W. F. M. (1992). A mean reverting walk down Wall Street. In R. H.Thaler (Ed.), The winner’s curse: Paradoxes and anomalies of economic life. New York: FreePress.Thaler, R. H., & Shefrin, H. M. (1981). An economic theory of self control. Journal of PoliticalEconomy, 89, 392–406.Thaler, R. H., & Sunstein, C. R. (2003, September 9). Who’s on first? The New Republic, p. 27.Thaler, R. H., & Ziemba, W. T. (1988). Anomalies: Parimutual betting makes markets: Racetracksand lotteries. Journal of Economic Perspectives, 2(2), 161–174.Thompson, L. (2001). The mind and the heart of the negotiator. Upper Saddle River, NJ: PrenticeHall.Thompson, L., Gentner, D., & Loewenstein, J. (2000). Avoiding missed opportunities in manageriallife: Analogical training more powerful than case-based training. Organizational Behaviorand Human Decision Processes, 82(1), 60–75.Thompson, L., & Loewenstein, G. (1992). Egocentric interpretations of fairness and interpersonalconflict. Organizational Behavior and Human Decision Processes, 51(2), 176–197.Tiedens, L. Z., & Linton, S. (2001). Judgment under emotional certainty and uncertainty: The effectsof specific emotions on information processing. Journal of Personality and Social Psychology,81(6), 973–988.Tor, A., & Bazerman, M. H. (2003). Focusing failures in competitive environments: Explainingdecision errors in the Monty Hall game, the acquiring a company problem, and multiparty ultimatums.Journal of Behavioral Decision Making, 16(5), 353–374.Trabasso, T., Rollins, H., & Shaughnessy, E. (1971). Storage and verification stages in processingconcepts. Cognitive Psychology, 2, 239–289.Tversky, A., & Kahneman, D. (1971). Belief in the law of small numbers. Psychological Bulletin,76(2), 105–110.Tversky, A., & Kahneman, D. (1973). Availability: A heuristic for judging frequency and probability.Cognitive Psychology, 5(2), 207–232.Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science,185, 1124–1131.Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice.Science, 211(4481), 453–458.Tversky, A., & Kahneman, D. (1983). Extensional versus intuitive reasoning: The conjunction fallacyin probability judgment. Psychological Review, 90(4), 293–315.Tversky, A., & Kahneman, D. (1986). Judgment under uncertainty: Heuristics and biases. In H.R. Arkes & K. R. Hammond (Eds.), Judgment and decision making: An interdisciplinary reader(pp. 38–55). Cambridge: Cambridge University Press.Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependentmodel. Quarterly Journal of Economics, 106(4), 1039–1061.
References 221Tversky, A., & Koehler, D. J. (1994). Support theory: A nonextensional representation of subjectiveprobability. Psychological Review, 101(4), 547–567.Tyler, T. R., & Hastie, R. (1991). The social consequences of cognitive illusions. In R. J. Bies,R. J. Lewicki, & B. H. Sheppard (Eds.), Research on negotiation in organizations (Vol. 3, pp.69–98). Greenwich, CT: JAI.Valley, K. L., Moag, J., & Bazerman, M. H. (1998). A matter of trust: Effects of communication onthe efficiency and distribution of outcomes. Journal of Economic Behavior and Organization,34, 211–238.Van Boven, L., Dunning, D., & Loewenstein, G. (2000). Egocentric empathy gaps between ownersand buyers: Misperceptions of the endowment effect. Journal of Personality and Social Psychology,79(1), 66–76.Vaughn, D. (1996). The Challenger launch decision: Risky technology, culture, and deviance atNASA. Chicago: University of Chicago.vonHippel, W., Lakin, J. L., & Shakarchi, R. J. (2005). Individual differences in motivated socialcognition: The case of self-serving information processing. Personality and Social PsychologyBulletin, 31, 1347–1357.vos Savant, M. (1990a). Ask Marilyn. Parade Magazine, New York.vos Savant, M. (1990b). Ask Marilyn. Parade Magazine, New York.vos Savant, M. (1991). Ask Marilyn. Parade Magazine, New York.Wade-Benzoni, K. A., Li, M., Thompson, L., & Bazerman, M. H. (2007). The malleability ofenvironmentalism. Analyses of Social Issues and Public Policy.Wade-Benzoni, K. A., Tenbrunsel, A. E., & Bazerman, M. H. (1996). Egocentric interpretations offairness in asymmetric, environmental social dilemmas: Explaining harvesting behavior and therole of communication. Organizational Behavior and Human Decision Processes, 67(2), 111–126.Wall Street Journal. (2007, January 29). Hedge-fund milestones. Retrieved July 11, 2007, fromhttp://online.wsj.com/article/SB115394214778218146.html?mod=2_1154_3Wason, P. C. (1960). On the failure to eliminate hypotheses in a conceptual task. Quarterly Journalof Experimenal Psychology, 12, 129–140.Webb, J. (2004, September 3). Bush’s bid to connect with voters. Retrieved July 11, 2007, fromhttp://news.bbc.co.uk/2/hi/americas/3623560.stm.Wegner, D. M. (1986). Transactive memory: A contemporary analysis of the group mind. In B.Mullen & G. R. Goethals (Eds.), Theories of group behavior (pp. 185–208). New York:Springer-Verlag.Wegner, D. M. (2002). The illusion of conscious will. Cambridge, MA: MIT Press.Weick, K. E. (1993). The collapse of sensemaking in organizations: The Mann Gulch disaster. AdministrativeScience Quarterly, 38(4), 628–653.Weinstein, N. D. (1980). Unrealistic optimism about future life events. Journal of Personality andSocial Psychology, 39(5), 806–820.Whitman, W. (1855/2001). Song of myself. Mineola, NY: Dover.Williams, J. E., Patson, C. C., Siegler, I. C., Eigenbrodt, M. L., Neieto, F. J., & Tyroler,H. (2000). Anger proneness predicts coronary heart disease risk. Circulation, 101, 2034–2039.Wilson,T.D.,Wheatley,T.,Meyers,J.M.,Gilbert,D.T.,&Axsom,D.(2000).Focalism: Asource of durability bias in affective forecasting. Journal of Personality and Social Psychology,78(5), 821–836.Windschitl, P. D., Kruger, J., & Simms, E. (2003). The influence of egocentrism and focalism onpeople’s optimism in competitions: When what affects us equally affects me more. Journal ofPersonality and Social Psychology, 85(3), 389–408.
- Page 3 and 4:
JUDGMENT INMANAGERIALDECISION MAKIN
- Page 5 and 6:
Dedicated toMHB: To Howard Raiffa,
- Page 7 and 8:
PREFACEBetween 1981 and 1983, one o
- Page 9 and 10:
ContentsChapter 1Introduction to Ma
- Page 11 and 12:
Contents ixOverestimating Your Val
- Page 13 and 14:
CHAPTERONEIntroduction to Manageria
- Page 15 and 16:
System 1 and System 2 Thinking 3di
- Page 17 and 18:
The Bounds of Human Rationality 5T
- Page 19 and 20:
Introduction to Judgmental Heuristi
- Page 21 and 22:
2. Are couples who marry under the
- Page 23 and 24:
An Outline of Things to Come 11who
- Page 25 and 26:
CHAPTERTWOCommon BiasesPlease read
- Page 27 and 28:
TABLE 2-1Chapter ProblemsCommon Bia
- Page 29 and 30:
Common Biases 17a. Drawing a red m
- Page 31 and 32:
Biases Emanating from the Availabil
- Page 33 and 34:
Biases Emanating from the Represent
- Page 35 and 36:
three flips of a coin or getting mo
- Page 37 and 38:
samples, scientists often grossly o
- Page 39 and 40:
Biases Emanating from the Represent
- Page 41 and 42:
Biases Emanating from the Confirmat
- Page 43 and 44:
Biases Emanating from the Confirmat
- Page 45 and 46:
Biases Emanating from the Confirmat
- Page 47 and 48:
Consider the following real-life sc
- Page 49 and 50:
Biases Emanating from the Confirmat
- Page 51 and 52:
Biases Emanating from the Confirmat
- Page 53 and 54:
TABLE 2-2 Summary of the Twelve Bia
- Page 55 and 56:
TABLE 3-1Chapter ProblemsRespond to
- Page 57 and 58:
Bounded Awareness 45Problem 6. Wit
- Page 59 and 60:
After showing the video the first t
- Page 61 and 62:
Focalism and the Focusing Illusion
- Page 63 and 64:
Bounded Awareness in Strategic Sett
- Page 65 and 66:
Bounded Awareness in Strategic Sett
- Page 67 and 68:
Bounded Awareness in Strategic Sett
- Page 69 and 70:
Bounded Awareness in Strategic Sett
- Page 71 and 72:
Bounded Awareness in Auctions 59th
- Page 73 and 74:
to have overbid, or at least not by
- Page 75 and 76:
Lawsuit: You are being sued for $50
- Page 77 and 78:
Framing and the Irrationality of th
- Page 79 and 80:
We Like Certainty, Even Pseudocerta
- Page 81 and 82:
participants who were given Version
- Page 83 and 84:
What’s It Worth to You? 71straig
- Page 85 and 86:
The Value We Place on What We Own
- Page 87 and 88:
Mental Accounting 75systematically
- Page 89 and 90:
Do No Harm, the Omission Bias, and
- Page 91 and 92:
Joint Versus Separate Preference Re
- Page 93 and 94:
Joint Versus Separate Preference Re
- Page 95 and 96:
Conclusion and Integration 83Given
- Page 97 and 98:
When Emotion and Cognition Collide
- Page 99 and 100:
The Impact of Temporal DifferencesW
- Page 101 and 102:
When Emotion and Cognition Collide
- Page 103 and 104:
Positive Illusions 91players or wi
- Page 105 and 106:
Positive Illusions 93individual’
- Page 107 and 108:
Self-Serving Reasoning 95attribute
- Page 109 and 110:
Emotional Influences on Decision Ma
- Page 111 and 112:
feedback on the decision not chosen
- Page 113 and 114:
CHAPTERSIXThe Escalation of Commitm
- Page 115 and 116:
The Unilateral Escalation Paradigm
- Page 117 and 118:
The Competitive Escalation Paradigm
- Page 119 and 120:
The Competitive Escalation Paradigm
- Page 121 and 122:
reasons. The first three classes of
- Page 123 and 124:
Why Does Escalation Occur? 111In h
- Page 125 and 126:
CHAPTERSEVENFairness and Ethics inD
- Page 127 and 128:
Perceptions of Fairness 115underpe
- Page 129 and 130:
Perceptions of Fairness 117include
- Page 131 and 132:
Perceptions of Fairness 119in thes
- Page 133 and 134:
These findings are consistent with
- Page 135 and 136:
Bounded Ethicality 123within firms
- Page 137 and 138:
Bounded Ethicality 125(Epley, Caru
- Page 139 and 140:
Bounded Ethicality 127implicit des
- Page 141 and 142:
Bounded Ethicality 129people. Inst
- Page 143 and 144:
Bounded Ethicality 131The results
- Page 145 and 146:
Bounded Ethicality 133played a pec
- Page 147 and 148:
Conclusion 135the classic experime
- Page 149 and 150:
Common Investment Mistakes 137to h
- Page 151 and 152:
The Psychology of Poor Investment D
- Page 153 and 154:
The Psychology of Poor Investment D
- Page 155 and 156:
The Psychology of Poor Investment D
- Page 157 and 158:
to taxes. From a tax perspective, w
- Page 159 and 160:
Action Steps 147island have been l
- Page 161 and 162:
choose them carefully. Some annuiti
- Page 163 and 164:
CHAPTERNINEMaking Rational Decision
- Page 165 and 166:
Together, these three sets of facts
- Page 167 and 168:
CLAIMING VALUE IN NEGOTIATIONConsid
- Page 169 and 170:
Creating Value in Negotiation 157I
- Page 171 and 172:
Creating Value in Negotiation 159c
- Page 173 and 174:
divided between negotiators. Yet, f
- Page 175 and 176:
The Tools of Value Creation 163The
- Page 177 and 178:
The Tools of Value Creation 165Typ
- Page 179 and 180:
Summary and Critique 167approach,
- Page 181 and 182: academic programs, corporate battle
- Page 183 and 184: view the negotiation with a positiv
- Page 185 and 186: Overestimating Your Value in Negoti
- Page 187 and 188: Self-Serving Biases in Negotiation
- Page 189 and 190: Anchoring in Negotiations 177separ
- Page 191 and 192: CHAPTERELEVENImproving Decision Mak
- Page 193 and 194: Strategy 1: Use Decision-Analysis T
- Page 195 and 196: Strategy 1: Use Decision-Analysis T
- Page 197 and 198: Strategy 1: Use Decision-Analysis T
- Page 199 and 200: Strategy 2: Acquire Expertise 187c
- Page 201 and 202: STRATEGY 3: DEBIAS YOUR JUDGMENTDeb
- Page 203 and 204: virtually everyone is subject to ju
- Page 205 and 206: substantially better in the Acquiri
- Page 207 and 208: Strategy 6: Understand Biases in Ot
- Page 209 and 210: Strategy 6: Understand Biases in Ot
- Page 211 and 212: Conclusion 199the decision-making
- Page 213 and 214: References 201Badaracco, J. L., Jr
- Page 215 and 216: References 203Bernoulli, D. (1738/
- Page 217 and 218: References 205Dasgupta, N. (2004).
- Page 219 and 220: References 207Gentner, D., Loewens
- Page 221 and 222: References 209Pension design and s
- Page 223 and 224: References 211Latane, B., & Darley
- Page 225 and 226: References 213Messick, D. M., Moor
- Page 227 and 228: References 215Nosek, B. A., Banaji
- Page 229 and 230: References 217Sanfey, A. G., Rilli
- Page 231: References 219Staw, B. M., & Ross,
- Page 235 and 236: IndexNote: Page numbers followed by
- Page 237 and 238: Daly, H., 126Damasio, A. R., 85, 86
- Page 239 and 240: Jordan, D. J., 146Joyce, E. J., 33J
- Page 241 and 242: Rational thinkingbounds of, 4-6abou