Critical Thinking Chapter 3 Summary

Chapter 3 of Bazerman’s text focuses on common biases and where they derive from. In past chapters the topic of heuristics was covered. Basically, heuristics are rules of thumb that people use to make quick and efficient decisions. “By providing managers with efficient ways to deal with complex problems, heuristics frequently produce effective decisions. However, heuristics also can lead managers to make systematically biased judgements. Biases result when an individual inappropriately applies a heuristic” (Bazerman 31). When people rely on these general rules of thumb they can quickly fall into the pitfalls of applying biases in business situations. This can cloud one’s judgement and lead to poor decision-making, as well as reduced efficiency. So, what are some of these common biases and how are they

The first grouping is “Biases Emanating from the Availability Heuristic” (Bazerman 58). These include ease of recall and retrievability biases. Both of these biases relate to how quickly one’s brain or memory can recall the information and then formulate the thought. The next group is “Biases emanating from the Representative Heuristic” (Bazerman 58). There are five biases included in this group and they are insensitivity to base rates, insensitivity to sample size, misconceptions of chance, regression to the mean and the conjunction fallacy. “The representativeness heuristic can often serve us well. After all, the likelihood of a specific occurrence is usually related to the likelihood of similar types of occurrences. Unfortunately, we tend to overuse this simplifying heuristic when making decisions” (Bazerman 46). This group of biases is related to how a specific scenario correlates to a previous scenario and what the likely outcomes are, however issues arise when people are too quick to fall back on this recollection. The last group of biases is described as “Biases Emanating from the Confirmation Heuristic” (Bazerman 58). The specific