![]() THE ANCHORING TRAP HOW TOThe authors show how to take action to ensure that important business decisions are sound and reliable. ![]() But executives can also take other simple steps to protect themselves and their organizations from the various kinds of mental lapses. The best way to avoid all the traps is awareness-forewarned is forearmed. And the recallability trap leads us to give undue weight to recent, dramatic events. The prudence trap leads us to be overcautious when we make estimates about uncertain events. On a foothold trap, the anchoring system should be attached with a swivel to the. The overconfidence trap makes us overestimate the accuracy of our forecasts. the animal welfare of furbearers captured in bodygrip traps and the. The framing trap occurs when we misstate a problem, undermining the entire decision-making process. The confirming-evidence trap leads us to seek out information supporting an existing predilection and to discount opposing information. The sunk-cost trap inclines us to perpetuate the mistakes of the past. The statusquo trap biases us toward maintaining the current situation-even when better alternatives exist. The first hidden trap of decision making is ANCHORING.When I read this, I couldnt help but recall my positive bias for all things made by Apple. John Hammond, Ralph Keeney, and Howard Raiffa examine eight psychological traps that are particularly likely to affect the way we make business decisions: The anchoring trap leads us to give disproportionate weight to the first information we receive. I am reading an article from the Harvard Business Review titled 'The hidden traps of decision making' for my Organizational Processes class.It provided much fodder for thought. The way the human brain works can sabotage the choices we make. But sometimes the fault lies not in the decision-making process but rather in the mind of the decision maker. A trap anchoring stake for anchoring an animal trap in soft or loose soils where in the past excessive stake length has been required to keep the trapped animal from pulling out the stake. The authors show how to ensure that important business decisions are sound and reliable.Bad decisions can often be traced back to the way the decisions were made-the alternatives were not clearly defined, the right information was not collected, the costs and benefits were not accurately weighted. But executives can also take other simple steps to protect themselves and their organizations from the various mental lapses. The best way to avoid all the traps is awareness. The overconfidence trap makes us overestimate the accuracy of our forecasts. The sunk-cost trap inclines us to perpetuate past mistakes. The status-quo trap biases us toward maintaining the current situation-even when better alternatives exist. Keeney, a professor at the University of Southern California, and Howard Raiffa, a professor emeritus at the Harvard Business School, examine eight psychological traps likely to affect the way we make business decisions: The anchoring trap leads us to give disproportionate weight to the first information we receive. Hammond, a management consultant, Ralph L. ![]() ![]() THE ANCHORING TRAP PLUSHBR OnPoint articles include the full-text HBR article plus a summary of key ideas and company examples. This is an enhanced edition of HBR article 98505, originally published in September/October 1998. ![]()
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