Title: Decision Making
Course: Question Banks

Q: Looking to the past and incorrectly believing you can predict the future based on past knowledge or understanding is the definition of:
- framing bias
- anchoring bias
- hindsight bias
A: hindsight bias

Q: You are looking for a used car, and you’re focused on finding one that has under 100k miles and is no older than 2006. In your search, you take little notice of the state of the engine or transmission. A month after buying the 2007 Busaru Scoutbeck with 98k miles, your transmission freezes on the way home from work. Which bias trap did you get yourself into that created this scenario?
- hindsight bias
- framing bias
- anchoring bias
A: anchoring bias

Q: For most of our decisions, we do not try to optimize the decision but simply make a good decision and move on. This is called
- good decision making
- rational decision making
- satisficing
A: satisficing

Q: Bob is very analytical in his approach to decisions. He looks at the available data and weighs each factor. His approach takes more time but often finds cost savings or improves quality. His approach is called
- intuitive decision making
- analytical decision making
- rational decision making
A: rational decision making

Q: Natalie, a location scout, has been very busy with work and noticed her cell phone is breaking down. She likes her old Pamsung phone but needs to get one that has faster network abilities, is not more than two hundred dollars, has international roaming capabilities, and is water-resistant if possible. She thinks maybe the latest Phonei would work, but then she realizes the most important criteria are water resistance and international roaming. After visiting five stores and spending countless hours online researching the various phones, she evaluates her options and decides to go with the Yons Aperix Z3v. She buys the phone and sets out to find her latest movie location. What decision model did Natalie use to pick her new phone?
- bounded rationality model
- intuitive decision-making model
- rational decision-making model
A: rational decision-making model

Q: Dean lives in Silver Spring, MD. His 15-year-old car has broken down, and he thinks he needs a new car. He remembers that the first step of the rational decision-making process is “define the problem.” What should he consider?
- Dean should consider his budget and look at new car ads.
- Dean should consider Consumer Reports ratings of new and used cars.
- Dean should consider all his transportation options, such as the Metrorail, Uber, or taxis, not just getting a new car.
A: Dean should consider all his transportation options, such as the Metrorail, Uber, or taxis, not just getting a new car.

Q: Kahneman and Tversky used experiments to examine how people actually make decisions about risk. The researchers found a multi-step process with editing and evaluating phases. People showed a strong preference to avoid losses, much more than probability or expected value would suggest. Their name for this process is
- risk theory
- loss avoidance
- prospect theory
A: prospect theory

Q: An important implication of prospect theory is that the way people subjectively frame an outcome affects their decision. Narrow framing is when people evaluate new gambles in isolation, ignoring other relevant risks. This is an example of
- foresight bias
- putting boundaries on a problem
- bounded rationality
A: bounded rationality

Q: Experts disagree how quickly self-driving cars will arrive in showrooms or how many customers will want them. Managers at General Motors must choose a path where GM does reasonably well in all scenarios. This is called
- rational decision making
- bounded rationality
- robust decision making
A: robust decision making

Q: E-commerce creates a great deal of data on how consumers interact with a website. L.L.Bean keeps records that show how quickly consumers make decisions, how many alternatives they explore, and whether they stop without completing a purchase. When a manager sees an issue and proposes a solution, the company can easily test the solution. This is an example of
- rational decision making
- robust decision making
- evidence-based decision-making
A: evidence-based decision-making

Q: Uber has an algorithm for setting prices. It increases prices during periods of high demand in part to attract more drivers to participate. Recently, the company is experimenting with route-based pricing. Some routes will pay more. Uber is using
- rational decision making
- natural experiments
- evidence-based decision making
A: evidence-based decision making

Q: Analytics that try to understand and describe what has taken place are ________. The analyst attempts to explain what the data reveals about the events that have occurred, the relationships between different events and market forces, and why the numbers are what they are.
- inferential
- predictive
- descriptive
A: descriptive

Q: If current trends are projected to continue in the future, decision makers will have access to rich insight. This work of projecting future trends is known as
- descriptive analytics
- inferential statistics
- predictive analytics
A: predictive analytics

Q: When you can break a decision down into stages or decision nodes with branches representing possible outcomes, which tool can you use to help you visualize your options?
- the Delphi technique
- expected value
- a decision tree
A: a decision tree

Q: In a decision tree with costs or net income and probabilities, each path of decisions and outcomes can be summarized in
- a likely decision
- a most likely path
- an expected value
A: an expected value

Q: What are distinct advantages of group decision making?
- Groups create internal competition and rancor that spurs creative thinking.
- Implementation is harder because group members were not invested in the decision.
- Decisions can be drawn from a larger number of individual perspectives and experiences.
A: Decisions can be drawn from a larger number of individual perspectives and experiences.

Q: If group members have a legitimate opportunity to participate in the decision-making process,
- they will not take ownership of the decision
- they will only buy in to the decision if they get their way
- they will be far more likely to support the decision
A: they will be far more likely to support the decision

Q: What are distinct disadvantages of group decision making?
- Groups suffer from making decisions too quickly.
- Some members will work less than others, but someone in the group always gets the job done.
- Groups may suffer from process losses, such as coordination or communication problems.
A: Groups may suffer from process losses, such as coordination or communication problems.

Q: Even when a group’s decision process is well-organized, there is no way around the process being
- faster and more expensive than individual decision making
- slower and less expensive than individual decision making
- slower and more expensive than individual decision making
A: slower and more expensive than individual decision making

Q: What action can help a group avoid groupthink?
- Make sure that all members have similar backgrounds and skills.
- Squash any efforts to debate ethical implications of decisions and potential solutions.
- Assign a rotating devil’s advocate role at every meeting.
A: Assign a rotating devil’s advocate role at every meeting.

Q: Which technique can help a group discuss a complex multi-factor decision?
- bounded rationality
- groupthink
- rational decision model
A: rational decision model

Q: What group decision-making process uses a series of written responses to a series of questionnaires instead of meeting in person to make decisions?
- Delphi Technique
- consensus
- nominal group technique (NGT)
A: nominal group technique (NGT)