When Decision Making Is Under a Condition of Uncertainty

question 66

Multiple Choice

When decision making is under a condition of uncertainty:

• A) the alternatives are not known.
• B) no ambiguity is involved.
• C) errors are least likely to occur.
• D) the consequences of solutions are known.
• E) the decision situation is simple.

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Definitions:

Anchoring and Adjustment Bias

A cognitive bias where an individual relies too heavily on an initial piece of information (anchor) when making decisions, even if it is unrelated or irrelevant.

Availability Bias

A cognitive bias where people overestimate the importance of information that is readily available to them.

Confirmation Error

A cognitive bias where individuals favor information that confirms their existing beliefs or hypotheses.

Representativeness Bias

A cognitive bias where individuals incorrectly assess the likelihood of an event based on how closely it resembles their stereotypes of a category.