People are not accustomed to thinking hard. They are often satisfied with a plausible answer that comes quickly to mind.

The prospect theory - the empirical exploration of risk assessment, loss aversion, and reference dependence, explains why people consistently behave in ...

Decision analysis is based on the idea that decision making is a choice between gambles. Managers think that they are fighting risk in a controlled way. The idea that you are gambling is an admission that you have lost control. It is detestable to decision managers, and the reason they reject dec...

Both individuals and groups need mechanisms to review how their decisions are made.

• Many businesses are averse to appointing someone to keep statistics on the decisions made and evaluate the biases, errors, the wrong forecasts, and the misjudged factors to make the p...

The perception of and reaction to risk is often dismissed as emotional. The first thing that happens is you're afraid, and from that fear, you feel risk. So the view of risk is becoming less cognitive while emotion becomes dominant.

Emotion is about what might hap...

In statistical thinking, professional statisticians informally think the degree of the probability distribution in a small group will closely resemble the probability distribution in the overall population.

In other words, even people who should know better make these mistakes. When they'r...

• Groups are better equipped than individuals to recognize an answer as correct. But, when the whole group is susceptible to similar biases, groups are inferior to individuals.
• Polarization can occur in groups. One major bias in risky decision making is optimism, while doubts are sup...