Refer to the scenario below to answer the following questions.
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.
-Mike advised Frank that he would be taking his newest sales executive, Eric, along on the trip to the Japanese auto maker's headquarters in Tokyo. When Frank asked how Eric was hired, Mike said, "Eric went to the same university as me, so I knew he had to be good!" Mike's comment demonstrates which of the following?
A) selective perception bias
B) hindsight bias
C) self-serving bias
D) sunk costs error
E) escalation of commitment

Question

Quizplus · Accepted Answer

Mike is using his own personal connection to Eric as a basis for assuming that he is good, demonstrating a selective perception bias. This bias involves selectively interpreting what we see based on our own interests, background, experience, and attitudes. Mike is interpreting Eric's qualifications as being strong simply because of his personal connection with him, rather than based on objective criteria.

Refer to the Scenario Below to Answer the Following Questions