Question

All of the following are mistakes to avoid in making rational decisions except letting sunk costs matter. focusing exclusively on fairness sticking to the status quo. making purchases using net benefit analysis.​

Answer 1

Answer: don’t trust your gut.

Unfortunately, trusting your gut in managerial decision making can often lead to unreliable solutions to simple problems. Many people would argue that you need to fail fast in order to learn from your mistakes.

But can people learn from all of their mistakes? Well, no.

It turns out that there are many structures of decisions that the human brain can not make rational decisions. When talking about managerial decision making, our ability to handle these structures are referred to as bias or blind spots. As decision-makers come across these blinds spots, they will need to take a proverbial timeout and do some back of the napkin math to derive the right answers.

So what are these blind spots?