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    Solution to Heuristics and Bias: Decision-making

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    Your employer, It's Electric, an electrical fixtures supply company has decided to purchase company cars for all of the sales staff. You have been asked to select the line of automobiles that should be purchased. You have decided that on grounds of economy and longevity you want to purchase one of those solid, stalwart, middle-class Swedish cars--either a Volvo or a Saab. As a prudent and sensible buyer, you go to Consumer Reports, which informs you that the consensus of their experts is that the Volvo is mechanically superior, and the consensus of the readership is that the Volvo has the better repair record.

    Prior to meeting with the Volvo sales people you talk the decision over with your supervisor. He reacts with disbelief and alarm: "A Volvo! You've got to be kidding. My brother-in-law had a Volvo. First, that fancy fuel injection computer thing went out. Had to replace it. Then the transmission and the clutch. Finally sold it in three years for junk."(Adapted from: Nisbett, R.E., et al., "Popular Induction: Information is Not Always Informative", in J.S. Carroll & J.W. Payne (Editors), Cognition and Social Behavior, Halsted, 1976)

    Part 1: Identify and explain the type of heuristics or bias in the reaction of your supervisor.

    Part 2: You do some additional research, including talking to Volvo owners. Your earlier research is confirmed.

    What heuristics will you employ to make your decision on whether to buy a Volvo?
    How can you use your knowledge of heuristics and biases to sway your supervisor to your viewpoint...and approve your recommendation?
    What information would you provide to your supervisor to help "influence" his/her decision making?

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    Solution Preview

    Your employer, It's Electric, an electrical fixtures supply company has decided to purchase company cars for all of the sales staff. You have been asked to select the line of automobiles that should be purchased. You have decided that on grounds of economy and longevity you want to purchase one of those solid, stalwart, middle-class Swedish cars--either a Volvo or a Saab. As a prudent and sensible buyer, you go to Consumer Reports, which informs you that the consensus of their experts is that the Volvo is mechanically superior, and the consensus of the readership is that the Volvo has the better repair record.

    Prior to meeting with the Volvo sales people you talk the decision over with your supervisor. He reacts with ...

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