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Daniel Kahneman's Theories

Discuss examples of Daniel Kahneman's theories and examples as they relate to your work and life. How do they change the way you think about forecasting?

1) You must provide specific examples of biases in forecasting you have observed or can expect in the work environment.
2) These biases must be related to names of biases named in the Kahneman articles.
3) You must provide some ways to guard against them or at least adjust for them in reaching managerial conclusions.

Readings

http://www.bloomberg.com/news/2011-10-24/bias-blindness-and-how-we-truly-think-part-1-daniel-kahneman.html
http://www.bloomberg.com/news/2011-10-25/bias-blindness-and-how-we-truly-think-part-2-daniel-kahneman.html
http://www.bloomberg.com/news/2011-10-26/bias-blindness-and-how-we-truly-think-part-3-daniel-kahneman.html
http://www.bloomberg.com/news/2011-10-27/bias-blindness-and-how-we-truly-think-part-4-daniel-kahneman.html.

Solution Preview

Daniel Kahneman's theories:
The theories that are proposed by Kahneman touch base in aspects of psychology of judgment, behavioral economics and decision making. Through the theories proposed by the Kahneman, the intuitive judgment that is held by an individual and the decision making process of an individual are assessed. One of the main theories proposed is the prospective theory. This is a behavioral economic theory that analyses the decision making procedure that exists between different alternatives that have to be selected in the presence of risks. The outcomes of the event are known in this case, giving the individual the chance to make rational, informed judgments. It is imperative to state that through the theory, the mode of thinking on forecasting has been altered since the past experiences held by an individual affect both present and future plans (Watkins, 1996).

Relation of the Theory to the Work Environment:
The stated theory proposes that the decision making process in the organization will be driven with the quest to avoid risks compared with the attaining of opportunities. This attitude has ...

Solution Summary

Discuss examples of Daniel Kahneman's theories and examples as they relate to your work and life. How do they change the way you think about forecasting?

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