Leader decision making

Transcription

1 Leader decision making by Philippe Jacquart Future Women Leaders Seminar Evian/ FRA, January 2011 Leaders are problem solvers by talent and temperament and by choice.... Harlan Cleveland

2 A pair of running shoes and a wristband cost a total of 110.-The shoes cost 100.-more than the wristband. How much does the wristband cost? + = Adapted from: Shane, F. (2005). Cognitive Reflection and Decision Making. The Journal of Economic Perspectives, 19(4): If it takes 5 volunteers 5 minutes to make 5 promotional packages, how long would it take 100 volunteers to make 100 promotional packages? Adapted from: Shane, F. (2005). Cognitive Reflection and Decision Making. The Journal of Economic Perspectives, 19(4):

3 Every year since 2000, the number of spectators at the annual athletic event has doubled. If the stadium s maximum capacity will be reached in 2030,when will the stadium be at half of it s maximum capacity? Adapted from: Shane, F. (2005). Cognitive Reflection and Decision Making. The Journal of Economic Perspectives, 19(4): Results from the (original) study This test was taken by university students (e.g., M.I.T., Princeton, Harvard), with no time constraint. 17% of students correctly answered all three questions. 32% of students missed all three questions.

4 So what does this tell us? We are irrational being, our decisions are biased in a number of ways But we are predictably irrational If we understand which kind of mistakes we make, we are better equipped to avoid making them Pareidolia

5 Comparedto otherdrivers, are youa betteror a worsedriver? Top half 50% Bottom half 50% Participants responses Swedish respondants US participants Top half 69% Top half 93% Bottom half 31% Bottom half 7% Svenson, O. (1981). Are we all less risky and more skillful than our fellow drivers? ActaPsychologica, 47(2):

6 The Dunning-Kruger Effect Adapted from Kruger, J., & Dunning, D. (1999). Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments. Journal of Personality and Social Psychology, 77 (6): Lucky Charms winning the race loosing race with lucky socks without lucky socks 10 5

7 The curseof the Sports Illustrated cover Individuals that appear on the coverof the Sports Illustrated magazine will later experience bad luck?! Regression towards the mean performance Exceptional performance Averageperformance over time time

8 A problem for a mathematician DuringWW II, the Royal Air Force had summoned one of England's most notedmathematiciansto help themsolvea problem Sample selection bias

9 Meet Colin Before this leadership seminar, you receive the following describing one of the presenters: People who know Colin consider him to be a rather cold person, intelligent, critical, practical, and determined. Can you make a mental picture of Colin? FIRE! A major fire breaks out in the stadium, you have to decide through which exit to evacuate the 6000 spectators: 1. Using exit A will save 2000 lives 2. Using exit Bhas a 33% chance of saving all 6000 people and a 66% possibility of saving no one Adapted from: Tversky, A., & Kahneman, D. (1981). The Framing of decisions and the psychology of choice. Science, 211 (4481):

10 Alternative options A major fire breaks out in the stadium, you have to decide through which exit to evacuate the 6000 spectators: 3. Using exit C will result in 4000 deaths 4. Using exit Dhas a 33% chance that no people will die and a 66% probability that all 6000 will die Adapted from: Tversky, A., & Kahneman, D. (1981). The Framing of decisions and the psychology of choice. Science, 211 (4481): Wait a minute What is the difference between these two options? Using exit Bhas a 33% chance of saving all 6000 people and a 66% possibility of saving no one Using exit Dhas a 33% chance that no people will die and a 66% probability that all 6000 will die THESE ARE THE SAME OPTIONS!

11 Meet Linda Linda is31 yearsold, single, outspoken, and verybright. Shemajoredin philosophy. As a student, shewas deeplyconcernedwithissues of discrimination and social justice, and also participated in anti-nuclear demonstrations. Which is more probable? A. Linda isa bankteller. B. Linda isa banktellerand isactive in the feminist movement. Tversky, A. and Kahneman, D. (1983). Extension versus intuitive reasoning: The conjunction fallacy in probability judgment. Psychological Review 90 (4): Conjunction fallacy People whoare bothbanktellersand active in the feministmovement. Bank tellers Active in the feminist mouvement

12 Gambler s fallacy You flip a (fair) coin 10 times and get the following sequence: heads/tails/heads/heads/heads/ tails / tails / heads / heads / heads/ What do you expect the next coin flip to be? Risky business Imagine you are faced with the following choice, you can either: 1.Receive (no strings attached) 2.Flip a coin with the chance of receiving (or nothing) What would you choose?

13 Risky business Imagine you are faced with the following choice, you can either: 1.Loose (no strings attached) 2.Have a 50% chance of loosing (or loosing nothing) What would you choose? Risk Aversion We have strong preference for avoiding losses As a consequence, we give more value to something we own than to something don t

14 VIDEO (Daniel Gilbert on our mistaken expectations) URL link: Meet Walter Before this leadership seminar, you receive the following describing one of the presenters: People who know Walter consider him to be a rather warm person, intelligent, critical, practical, and determined. Can you make a mental picture of Walter?

15 Warm Walter, Cold Colin Kelley, H.H. (1950). The warm-cold variable in first impressions of persons. Journal of. Personality, 18, Meet Joshua Bell

16 Would you like some vinegar in your beer?. Lee, L., Frederick, S., &Ariely, Dan (2006) Try It, You'llLike It. The Influence of Expectation, Consumption, and Revelation on Preferences for Beer.Psychological Science, 17(12): Vinegar beer tasting. Lee, L., Frederick, S., &Ariely, Dan (2006) Try It, You'llLike It. The Influence of Expectation, Consumption, and Revelation on Preferences for Beer.Psychological Science, 17(12):

17 What to expect from having expectations? Expectations (stereotypes): influence judgement direct attention guide information encoding and memory CONFIRMATION BIAS Awareness test VIDEO (Moon walking bear) URL link:

18 Change blindness VIDEO (Changing experimenters) URL link: Recapitulation

19 Recapitulation We make predictable mistakes when making decisions We had a quick look at the following biases:

20 Overconfidence The Dunning-Kruger effect incompetent and unaware of it Illusionary correlation Regression to the mean Framing effect Conjunction fallacy Gambler s fallacy Aversion to risk Dan Gilbert s talk onour inability to predict value Expectations influence judgement: cold vs. warm person playing the violin in the subway vinegar in the beer Expectations direct attention: moon-walking bear video also, attention is limited (e.g., change blindness video)

21 Confirmation bias Biased search for information Biased interpretation of information Biased memory Biased interpretation of information Westen, D., Kilts, C., Blagov, P., Harenski, K., & Hamann, S. (2006). The neural basis of motivatedreasoning: An fmristudy of emotionalconstraints on politicaljudgmentduring the U.S. Presidentialelection of Journal of Cognitive Neuroscience, 18,

22 Biased interpretation of information During the 2004 US presidential election, political partisans were presented with two pieces of information: 1.A statement from Bush or Kerry 2.Information clearly indicating that the politicians did not do what they said Subject then considered this inconsistency while researchers monitored their cerebral activity Westen, D., Kilts, C., Blagov, P., Harenski, K., & Hamann, S. (2006). The neural basis of motivatedreasoning: An fmristudy of emotionalconstraints on politicaljudgmentduring the U.S. Presidentialelection of Journal of Cognitive Neuroscience, 18, Biased memory Cantor, N. &Mischel., W. (1979). Prototypes in person perception. In L. Berkowitz (Ed.), Advances in Experimental Social Psychology(Vol. 12, pp. 3-52). New York: Academic Press.

23 Explaining others behaviour Two types of explanations The individual The situation e.g., neuroticism e.g., stressful event The fundamental attribution error is the tendency to disregard the effect of the situation when we try to explain the behaviour of others.

24 The Castro essays Jones, E.E. & Harris, V. A. (1967). The attribution of attitudes. Journal of Experimental Social Psychology3, 1 24 VIDEO (Dan Arielyasks, Are wein control of ourowndecisions?) URL link: ecisions.html

25 Leadership, power & decision making Moral hypocrisy Moral hypocrisy consists in imposing stricter moral standards to others than we do to ourselves Guess what is the relationship between power and moral hypocrisy Lammers, J., Stapel, D. A., &Galinsky, A. D. (2010). Power increaseshypocrisy; Moralizingin reasoning, immoralityin behavior.psychological Science, 21,

26 Moral hypocrisy Lammers, J., Stapel, D. A., &Galinsky, A. D. (2010). Power increaseshypocrisy; Moralizingin reasoning, immoralityin behavior.psychological Science, 21, Interpersonal sensitivity Interpersonal sensitivity is the ability to perceive (and respond to) the internal states of others Guess what is the relationship between power and interpersonal sensitivity Lammers, J., Stapel, D. A., &Galinsky, A. D. (2010). Power increaseshypocrisy; Moralizingin reasoning, immoralityin behavior.psychological Science, 21,

27 Group decision making How many people live in Switzerland? Is the total population of Switzerland greater than, or inferior to, '000'000 people? 5'000'000 people?

28 How many people live in Switzerland? M = 5'140'000 How many people live in Switzerland? M = 8'857' %

29 Anchoring by the way, the population of Switzerland is 7'785'600 inhabitants Group think

30 Abilene s paradox VIDEO (Family group decision about diner) URL link: To whichline on the right isthe line on the leftof equallength? 1 2 3

31 The Asch Conformity Experiment VIDEO (Asch conformity experiment) URL link: Expo64

32 Wisdom of the crowds M =1'964 SD =25.34 Wisdom of the crowds VIDEO (Origins and explanation of the Wisdom of the crowds) URL link:

33 Remedies to Group Think Leadership Devil s advocate Additional readings