Lecture
It manifests itself in the fact that the DM (decision maker) makes a decision based on the preference rules he has chosen.
Note!
In individual decision-making, preference rules are determined by a single person.
In accordance with the concept of bounded rationality, the DM selects the final decision from among the alternatives, but in making this choice on the basis of certain preference rules, the DM can make a mistake. He may fall into a psychological trap — it seems to him that, acting in accordance with these preference rules, he is choosing a good option — one that satisfies him — but the actual result of the choice may turn out to be worse than expected.
Note!
A psychological trap in decision-making based on certain preference rules is a situation in which the actual results of the choice may be worse than those the DM expects when applying these rules. The emergence of a psychological trap is explained by the phenomenon of human behavior in forming preference rules and in making a final decision on their basis.
To increase the effectiveness of using certain preference rules, it is necessary to know about the possible psychological phenomena that manifest themselves when choosing preference rules and lead to a situation where the results of applying the chosen rules in selecting alternatives turn out to be worse than expected.
An analysis of DM behavior in individual decision development has revealed the following most frequently occurring phenomena.
The first-alternative dominance phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the erroneous use, in the preference rules, of an overestimated assessment of the significance of the first alternative developed and considered. It is often accompanied by a refusal to consider other alternatives or to reassess the significance of the first alternative, despite additional information having been obtained on it that justifies the need for such a reconsideration.
The reactive resistance phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the DM's active response to external pressure regarding consideration of one alternative or another, expressed in the fact that the DM makes a decision about the alternative solely with regard to this pressure — resisting it, sometimes even contrary to common sense.
The inadequate quality assessment phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the erroneous use, in the preference rules, of an unjustified exaggeration or understatement of the quality of alternatives, which is often determined by the DM's positive or negative mood at the moment of assessing the quality of alternatives.
The confirmation phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the DM's confidence, unconfirmed by actual data and circumstances, in the correctness and validity of the choice.
The «competence anchor» phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the discrepancy between the competence required of the DM in selecting alternatives and the DM's self-assessment of his competence (the competence anchor).
The cognitive resonance phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the adoption of a decision that is a compromise or that contradicts the DM's knowledge, beliefs, opinions and attitudes.
The sufficiency-of-first-operations phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the erroneous use, in the preference rules, of the notion that a certain proportion of the number of operations describing a process or phenomenon can characterize the entire process or phenomenon. This phenomenon may also be due to the limited capacity of a person to process information.
The information-perception barrier phenomenon — a variant of DM psychological behavior in which the cause of discrepancies between the actual and expected results of an alternative's selection is the DM's unwillingness or inability to perceive new, voluminous, undesirable information.
As practice shows, most phenomena of human psychological behavior leading to errors are associated with decision-making under conditions of risk and uncertainty.
Note!
Decisions made under conditions of risk are those whose results are not certain, but the probability of each result is known. Probability is defined as the degree of possibility of a given event occurring and ranges from 0 to 1. The sum of the probabilities of all alternatives must equal one.
Decisions made under conditions of uncertainty refer to situations where it is impossible to estimate the probability of potential outcomes. This is often because the factors that need to be taken into account are so new and complex that it is impossible to obtain the necessary information about them. As a result, the probability of a particular consequence cannot be predicted with a sufficient degree of reliability. Uncertainty is characteristic of some decisions that have to be made under rapidly changing circumstances.
The random-event probability assessment phenomenon — a variant of DM psychological behavior in which heuristic, subjective assessments of the outcomes of random events and their probabilities are used in the preference rules. The reason for possible discrepancies between actual and expected results is the use of heuristics. Nevertheless, the managerial decision usually adopted, although not optimal, provides the required effectiveness.
The representativeness phenomenon — a variant of the decision maker's (DM's) psychological behavior in which the reason for the discrepancy between the actual results of choosing an alternative and the expected ones is due to the erroneous use, in preference rules, of overestimated assessments of outcomes and/or probabilities of those random events that correspond to the DM's personal experience or established stereotypes. Variants of its manifestation are: overestimating assessments of particular and specific events compared to general and abstract ones; the erroneous notion that small samples of event outcomes will necessarily possess the properties of large samples; the incorrect notion that the frequency of a recurring event outcome determines the probability of its occurrence.
The availability phenomenon — a variant of the DM's psychological behavior in which the reason for the discrepancy between the actual results of choosing an alternative and the expected ones is due to the erroneous use, in preference rules, of overestimated or underestimated probabilities of those events that have somehow become fixed in the DM's memory. For example, the DM has repeatedly received certain information in the media, and therefore relies on it; some situation was discussed quite often, and therefore seemed to the DM to be the most significant, etc.
The illusion-of-control phenomenon — a variant of psychological behavior in which the reason for the discrepancy between the actual results of choosing an alternative and the expected ones is due to the erroneous use, in preference rules, of an idea about the probability of an event (increased for a desired event or decreased for an undesired event), based on the desire to obtain a preferred outcome and on the DM's false confidence that events will not get out of control.
The valence phenomenon — a variant of the DM's psychological behavior in which the reason for the discrepancy between the actual results of choosing an alternative and the expected ones is due to the erroneous use, in preference rules, of an overestimated probability of a positive outcome and an underestimated probability of a negative outcome under an unjustifiably optimistic mindset of the DM, as well as an overestimated probability of a negative outcome and an underestimated probability of a positive outcome under a pessimistic mindset of the DM.
The compound-events phenomenon — a variant of the DM's psychological behavior in which the reason for the discrepancy between the actual results of choosing an alternative and the expected ones is that, in preference rules, the probability is overestimated for an event that should be regarded as the product of other events, and underestimated for an event that should be regarded as the sum of other events.
The anchor phenomenon — a variant of the DM's psychological behavior in which the reason for the discrepancy between the actual results of choosing an alternative and the expected ones is due to the erroneous use, in preference rules, of a certain parameter value when assessing the probabilities of events and/or their significance, caused by the anchoring of thinking to that value in other situations and the "resurfacing" of that value at the moment of assessment. For example, when discussing production growth rates for different enterprises, the figure of 11% came up most often, as a result of which, in another situation, for example when discussing inflation rates, the DM erroneously uses the same figure.
The risk-attitude phenomenon — a variant of the DM's psychological behavior in which the reason for the discrepancies is due to the erroneous use, in preference rules, of the following DM's attitude toward risk — in the case of a voluntary choice of alternatives, the DM's propensity for risk generally increases, while in the case of a forced choice it decreases. The DM's erroneous attitude toward risk can also be influenced by other factors, for example, the scale of the decision and the degree of the DM's responsibility for the decision being made.
Please note!
In the individual formation (development) of managerial decisions made by the DM, the manifestation of certain psychological phenomena can lead to a discrepancy between the actual results of choosing an alternative and the expected ones.
Psychological phenomena that negatively affect the final result of choosing an alternative manifest themselves in the formation of the preference rules used to select the final decision, or in the choice of the final decision, or in both cases simultaneously.
Please note!
In addition to the phenomena of psychological behavior of each individual group member that negatively affect the deviation of the actual result of making the final decision from the expected one, there may exist phenomena of psychological behavior of all group members at once, which also negatively affect the possibility of a discrepancy between the actual results of decision-making and the expected ones.
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