S08 Collaborative decision making

01

Readings

Kahneman, Lovallo and Sibony · Harvard Business Review, 2011

Twelve questions a decision maker asks to catch bias in a team’s recommendation.

Ask about the team: self-interest, falling in love with the idea, groupthink.
Ask about the proposal: misleading analogies, missing alternatives, missing data, anchors, halo effect, sunk costs.
Ask about the assessment: an optimistic base case, a worst case that is not bad enough, too much caution.

02

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Kahneman, Lovallo and Sibony

S08

Check the team, the proposal and the assessment.

Self-interest	Is there a reason to suspect motivated errors?
Affect heuristic	Has the team fallen in love with its proposal?
Groupthink	Were there dissenting opinions?
Saliency	Is the analysis overly influenced by an analogy?
Confirmation	Were credible alternatives considered?
Availability	If you made this decision again in a year, what information would you want?
Anchoring	Where are the numbers from?
Halo effect	Is the team assuming success in one area carries to another?
Sunk cost	Are recommenders too attached to past decisions?
Overconfidence	Is the base case overly optimistic?
Disaster neglect	Is the worst case bad enough?
Loss aversion	Is the team overly cautious?

Course video

S08

Common ways the mind tilts a decision.

Anchoring	First number pulls later ones
Status quo	Favoring what already is
Sunk cost	Protecting past choices
Confirming evidence	Seeking support, ignoring disproof
Framing	The way it is posed shapes the answer
Estimating	Overconfidence and recall bias in forecasts

04

Q1“Where did that number come from?” checks for

Q2“Is the worst case bad enough?” checks for

Q3A team attached to a past investment shows

0 of 3 answered.

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