Cognitive Biases and Decision-Making Concepts

The video explores decision-making processes, highlighting psychological phenomena like the sunk cost fallacy, loss aversion, and anchoring. It emphasizes understanding opportunity costs and simplifying decision-making by narrowing options and using tools like pros and cons lists. The video also discusses risk, loss aversion, and ethical considerations, using the Enron scandal as an example. It concludes by encouraging learning from past decisions and avoiding common errors.

What is a common psychological phenomenon that can affect our decision-making?

• Sunk cost fallacy

• Opportunity cost

• Weighted scorecard

• Public transportation

What is the term for the cost of choosing one option over another?

• Anchoring

• Loss aversion

• Sunk cost

• Opportunity cost

Which method can help in evaluating options by assigning point values to priorities?

• Anchoring

• Weighted scorecard

• Confirmation bias

• Sunk cost analysis

What is the tendency to ignore evidence that contradicts our beliefs called?

• Anchoring

• Loss aversion

• Confirmation bias

• Sunk cost fallacy

What is the term for avoiding questions or ignoring unethical behavior because it benefits us?

• Confirmation bias

• Motivated blindness

• Anchoring

• Loss aversion

What was the main issue with Enron's corporate culture that led to its downfall?

• Confirmation bias

• Opportunity cost

• Motivated blindness

• Sunk cost fallacy

What is the term for continuing a project due to the time and effort already invested, even if it's not working?

• Planning fallacy

• Anchoring

• Sunk cost fallacy

• Loss aversion

What is the planning fallacy?

• Underestimating the time needed for a task

• Overestimating the benefits of a decision

• Ignoring opportunity costs

• Avoiding ethical considerations

Why is it important to learn from past decisions?

• To avoid making any decisions in the future

• To understand the arbitrary nature of outcomes

• To ensure all decisions are perfect

• To eliminate all risks

What should you consider when making a decision to avoid ethical mishaps?

• The opportunity cost

• The planning fallacy

• The butterfly effect

• The potential for motivated blindness