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Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation
PURPOSE: Operations managers are subjected to various cognitive biases, which may lead them to make less optimal decisions as suggested by the normative models. In their seminal work, Tversky and Kahneman introduced three heuristics based on which people make decisions: representativeness, availabil...
Autores principales: | , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Dove Medical Press
2019
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6462158/ https://www.ncbi.nlm.nih.gov/pubmed/31040729 http://dx.doi.org/10.2147/PRBM.S193092 |
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author | AlKhars, Mohammed Evangelopoulos, Nicholas Pavur, Robert Kulkarni, Shailesh |
author_facet | AlKhars, Mohammed Evangelopoulos, Nicholas Pavur, Robert Kulkarni, Shailesh |
author_sort | AlKhars, Mohammed |
collection | PubMed |
description | PURPOSE: Operations managers are subjected to various cognitive biases, which may lead them to make less optimal decisions as suggested by the normative models. In their seminal work, Tversky and Kahneman introduced three heuristics based on which people make decisions: representativeness, availability, and anchoring. This paper aims to investigate the six cognitive biases resulting from the use of the representativeness heuristic, namely, insensitivity to prior probability of outcomes, insensitivity to sample size, misconception of chance, insensitivity to predictability, the illusion of validity, and misconception of regression. Specifically, the paper examines how cognitive reflection and training affect these six cognitive biases in the operations management context. METHODS: For each cognitive bias, a scenario related to operations management was developed. The participants of the experimental study are asked to select among three responses, where one response is correct and the other two are biased. A total of 315 students from the University of North Texas participated in this study and 302 valid responses were used in the analysis. RESULTS: The results show that in all six scenarios, >50% of the respondents make biased decisions. However, using simple training, the bias is significantly reduced. Regarding the relationship between cognitive biases and cognitive reflection, the results partially support the hypothesis that people with high cognitive reflection ability tend to make less biased decisions. Regarding the effect of training on making biased decisions, the results show that making people aware of the existence of cognitive biases helps them partially to avoid making biased decisions. CONCLUSION: Overall, our study demonstrates the value of training in helping operations managers make less biased decisions. Our discussion section offers some related guidelines for creating a professional environment where the effect of the representativeness heuristic is minimized. |
format | Online Article Text |
id | pubmed-6462158 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2019 |
publisher | Dove Medical Press |
record_format | MEDLINE/PubMed |
spelling | pubmed-64621582019-04-30 Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation AlKhars, Mohammed Evangelopoulos, Nicholas Pavur, Robert Kulkarni, Shailesh Psychol Res Behav Manag Original Research PURPOSE: Operations managers are subjected to various cognitive biases, which may lead them to make less optimal decisions as suggested by the normative models. In their seminal work, Tversky and Kahneman introduced three heuristics based on which people make decisions: representativeness, availability, and anchoring. This paper aims to investigate the six cognitive biases resulting from the use of the representativeness heuristic, namely, insensitivity to prior probability of outcomes, insensitivity to sample size, misconception of chance, insensitivity to predictability, the illusion of validity, and misconception of regression. Specifically, the paper examines how cognitive reflection and training affect these six cognitive biases in the operations management context. METHODS: For each cognitive bias, a scenario related to operations management was developed. The participants of the experimental study are asked to select among three responses, where one response is correct and the other two are biased. A total of 315 students from the University of North Texas participated in this study and 302 valid responses were used in the analysis. RESULTS: The results show that in all six scenarios, >50% of the respondents make biased decisions. However, using simple training, the bias is significantly reduced. Regarding the relationship between cognitive biases and cognitive reflection, the results partially support the hypothesis that people with high cognitive reflection ability tend to make less biased decisions. Regarding the effect of training on making biased decisions, the results show that making people aware of the existence of cognitive biases helps them partially to avoid making biased decisions. CONCLUSION: Overall, our study demonstrates the value of training in helping operations managers make less biased decisions. Our discussion section offers some related guidelines for creating a professional environment where the effect of the representativeness heuristic is minimized. Dove Medical Press 2019-04-10 /pmc/articles/PMC6462158/ /pubmed/31040729 http://dx.doi.org/10.2147/PRBM.S193092 Text en © 2019 AlKhars et al. This work is published and licensed by Dove Medical Press Limited The full terms of this license are available at https://www.dovepress.com/terms.php and incorporate the Creative Commons Attribution – Non Commercial (unported, v3.0) License (http://creativecommons.org/licenses/by-nc/3.0/). By accessing the work you hereby accept the Terms. Non-commercial uses of the work are permitted without any further permission from Dove Medical Press Limited, provided the work is properly attributed. |
spellingShingle | Original Research AlKhars, Mohammed Evangelopoulos, Nicholas Pavur, Robert Kulkarni, Shailesh Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
title | Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
title_full | Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
title_fullStr | Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
title_full_unstemmed | Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
title_short | Cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
title_sort | cognitive biases resulting from the representativeness heuristic in operations management: an experimental investigation |
topic | Original Research |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6462158/ https://www.ncbi.nlm.nih.gov/pubmed/31040729 http://dx.doi.org/10.2147/PRBM.S193092 |
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