Decision-making Biases (Scenario)
Frank is president of Mega Manufacturing, a Canadian company that makes automobile parts. Sales and profits are down sharply this quarter, and Frank needs to analyze the series of events that have led to the poor performance. Frank begins by reviewing his recent interactions with Mike, the vice-president of sales.
-Last week when Frank asked Mike how his presentation to a large Japanese car maker went,Mike replied,"My presentation was brilliant! They loved me! I am positive we will get the contract!" Mike's overly positive view of his performance demonstrates which of the following?
A)confirmation bias
B)hindsight bias
C)overconfidence bias
D)escalation of commitment

Question

Quizplus · Accepted Answer

Mike's overly positive view of his performance is an example of overconfidence bias - he has too much confidence in his abilities and the outcomes of his actions. Confirmation bias is the tendency to seek out information that confirms one's existing beliefs, hindsight bias is the tendency to view past events as more predictable than they actually were, and escalation of commitment is the tendency to continue investing in a failing course of action even when it's clear it's not working. None of these biases are demonstrated in this scenario.

Decision-Making Biases (Scenario) Frank Is President of Mega Manufacturing, a Canadian Company That