Trap in decision making

1. TRAP IN DECISION MAKING
Presenter and Learner: Pon Nguyen

2. A
B

3. A
B

4. A
B

5. A
B

7. • Mind gives a bit much
weight to the first
information it receives
Initial impression, data
anchor the thoughts
Anchor trap

8. How to do about it:
• View problems from multiple
perspectives
• Develop your own opinion before
asking others
• Be open-minded to get consulted

9. STATUS-QUO TRAP

10. • Biases influence decision
• The mind desires to protect ego:
Breaking the status-quo mean -> taking
responsibility -> opening up self to
criticism -> opening up self to regret
• Sin of commission ( doing something )
punished more than sins of omission (
doing nothing )

11. How to do about it
 Does the status quo
support?
 Never think it is only the
alternative
 Avoid overestimating
changing costs
 “The world is changing in
every seconds. If you do not
change, it lefts you behind”

12. SUNK COST TRAP
 Cost that has already been
incurred by past decisionWe have gone too far to
draw back !!!

13. • Unwillingness to admit poor
decisions, worry about
public/private criticism
• Old investment of resources
that are not recoverable
• Deep seeded bias to make
decision that justify or protect
the past decision

14. How to do about it?
 Seek advice from people who did
not involved past decision
 Examine why admitting to an
earlier mistake distress you
 Do not create a failure-fearing
culture.

15. The Confirming - Evidence Trap

16. A man looks for what he wants to see

17. • We are unaware to decide what we
want to do before figure out why
we want to do it
• Being more engaged by things we
like than things we dislike

18. How to do about it
 Avoid accepting confirming evidence without asking
 Need someone argue against your evidence
 Be honest with yourself about your motives
 In seeking advice, do not ask leading question.

19. The way a problem is
worded for “ framed” can
profoundly influence the
choices we make
FRAMING TRAP

22. LOSS DISLIKE

23. RISK SEEKING

24. How to do about it
• Do not automatically
accept initial “frame”
• Challenge with different
frame, reference points

25. Unsinkable Even God can not make it sunk
Apr 10 1912

26. Four days later, Apr 14 1912

27. PRUDENCE TRAP

28. RECALLABILITY TRAP

29. How to do about it
 To avoid overconfident by
examining extreme, low and high
ends of possible range of value
 To avoid prudence trap one should
check to make sure any forecast
inputs are reasonable
 To avoid recallability one should
examine assumptions to make sure
not biased by past experience

30. Reference:
 The Hidden Traps in Decision Making by John S. Hammond, Ralph L. Keeney,
Howard Raiffa.
 Thinking, Fast and Slow by DANIEL KAHNEMAN.
 Documents, video from youtube.com

31. THANK YOU VERY MUCH
FOR YOUR TIME