|Module / ECTS / Path / Specialisation||Module :Behavioral decision-making : 3 ECTS.|
|Open for visitors||yes (3 ECTS)|
|Working language :||English|
|Volume of contact hours :||20 h|
|Workload to be expected by the student :||60 h|
Track : Attendance
|LEARNING GOAL 1 : Students will master state-of-the-art knowledge and tools in management fields in general, as well as in areas specific to the specialized field of management.|
|Students will identify a business organization’s operational and managerial challenges in a complex and evolving environment.|
|Students will understand state-of-the-art management concepts and tools and use them appropriately.|
|Students will implement appropriate methodologies to develop appropriate solutions for business issues.|
|LEARNING GOAL 2 : Students will develop advanced-level managerial skills.|
|Students will work collaboratively in a team.|
|Students will participate in a decision-making process in a critical way.|
|Students will communicate ideas effectively, both orally and in writing, in a business context.|
This course introduces Masters’ students to the field of behavioral decision making. The main focus is on the ability to a better understanding of the psychological mechanisms, clues and limitations lying behind individuals’ decisions.
- Identify the types of heuristics that managers and consumers can use to make simple judgments.
- Define fairness and ethics in decision making and identify some of the issues that arise from unethical or deviant behavior.
- Review the key components and research approaches on decision making.
- Explain the role and importance of decision making to management and describe and interpret distinct decision making theories.
- Recognize the factors that influence managers’ and consumers’ decision making process.
- Discuss that the consumer and managerial decision making process is not always rational and is subject to biases
- Demonstrate how managers could improve their decision making judgment capabilities.
2. Rational decision making.
3. Behavioral decision making.
4. Common biases and psychological traps in decision making.
5. Managerial examples.
6. Tips for improving decision making.
7. Presentations [students’ work].
Details about the group work:
• Students should form groups of 3 to 4 people and deliver an oral presentation (max. 15 minutes) in the final sessions of the course.
• Groups should also deliver a consultancy-format (PowerPoint) report (two weeks after the final sessions of the course), based on (but extending) the oral presentation delivered in-class.
• Students should select a behavioral decision making topic, present its theoretical and practical relevance, and illustrate it with a real-life managerial example of a company.
• Please note that the real-life example should be presented as a managerial problem and could be based on a brief case-study, news, research, direct information from companies, etc... It is vital to highlight how the theoretical concepts influenced the situation. A possible (and pertinent) solution to the aforementioned problem should be presented. The work should culminate with a discussion of what could we learned from the situation.
Key questions to be answered in the group work:
• Why is the theoretical framework/concept important to address the problem?
• What is the specific issue/problem all about?
• How did the company succeed/fail to solve the problem?
• Which alternatives arise and which lessons could we learn from the case?
Examples of overarching theoretical framework concepts:
• Anchoring; Status-quo; Confirming-evidence; Escalation of commitment [sunk-cost fallacy]; Framing; Overconfidence and optimism; Prudence; Recallability; Bounded awareness; Emotional influences; Common investment mistakes; Negotiation; Risk and uncertainty; Choice over time; Intuition; BDM in groups and teams; Cooperation and coordination; Ethics in BDM.
No strict pre-requisites, although basic knowledge at the undergraduate level (e.g., Introduction to Management) is recommended.
• Ariely, D. (2010). Predictably irrational: The hidden forces that shape our decisions (revised and expanded edition). NY: Harper Perennial.
• Bazerman, M.H., & Moore, D.A. (2013). Judgment in managerial decision making (8th edition). Hoboken, NJ: John Wiley & Sons.
• Hardman, D. (2009). Judgment and decision making: Psychological perspectives. West Sussex, UK: BPS Blackwell.
• Kahneman, D. (2011). Thinking, fast and slow. NY: Farrar, Straus and Giroux.
• HBR’S 10 must reads (2013). On making smart decisions. Boston, MA: Harvard Business Review Press.
Such behaviors as...
... may lead to expulsion from classes.