Behavioral Decision Making: Traps and Biases to Avoid



It is estimated that the average person makes approximately 260 decisions daily. Reasoning, judging and deciding are important aspects of everyday life and are particularly critical in the context of business. For example, managers routinely make decisions amid uncertainty and too little time; the daily life of the entrepreneur involves kneejerk judgments, quick decisions, and often emotional attachments; marketers, consultants and financial advisors need to influence by understanding the behavior of their consumers and clients. Research in the behavioral sciences has demonstrated convincingly that despite our best intentions, as decision makers we are often prone to err. We are influenced by biases, swayed by emotions, seduced by information and we routinely favor “fast and dirty” approaches to making decisions even when more principled models and methods are available. When do we err? How do we err? Why do we do so? And how can we do better? The course material is based on empirical findings (often counterintuitive) from research and practical actual business examples that had led managers to wrong decisions.

Audience and goals:

The course is intended for a broad audience of executives, middle managers, administrators, first line managers, marketers, consultants, entrepreneurs, or anyone seeking a better understanding of judgment and decision making from a behavioral perspective. After participating in this course, you should expect to:

1. Learn to identify the types of situations that pose challenges to our ability to reason and make good decisions.

2. Recognize important cognitive, emotional and social biases and fundamental limitations that can influence how we reason and decide.

3. Understand a range of our heuristics based decision making and the situations in which these lead to good, bad, and decidedly ugly outcomes.

4. Learn how we can reason and decide more effectively by limiting or avoiding our biases, default approaches, and limitations.

5. Understand how behavioral concepts from the course apply to business contexts such as consumer marketing, financial investing, consulting, and general management.


The course will rely on a range of methods including discussion-oriented lectures, experiential simulators, mini behavioral “experiments” and an integrative case.


This is a 2 days seminar
Day 1:  09:00-16:00.

Session1: Types of Decisions – Group Decision Making – Boom & Bust Behaviors – Managerial Decision Making Styles – Heuristics and Biases in Decision Making.

Session 2: Intuition – Perception – Ambiguity – Overconfidence – Availability – Retrievability – Ease of Recall.

Session 3: Base Rates – Sample Size – Misconceptions of Chance – Regression to the Mean.

Session 4: Conjunction Fallacy – Representativeness – Confirmation – Anchoring. Short Group Activity.

Day 2:  09:00-16:00.

Session 1: Change Blindness – Inattentional Blindness – Bounded Awareness.

Session 2: Framing – Loss Aversion – Certainty – Risk Policies – Mental Accounting

Session 3: Emotions – The Status Quo – Escalation of Commitment – Sunk Costs.

Session 4: Integrative group activity, Discussion, Closing remarks.