Business System Analysis

1
Business System Analysis Decision Making-
Lecture 6

• Zhangxi Lin
• ISQS 5340
• July 2006

2
Chapter 4 Motivational and Affective Influence
on Decision Making

• When Affect and Cognition Collide
• Positive Illusions
• Self-Serving Reasoning
• Affective Influences on Decision Making

3
When Affect and Cognition Collide

• Two different selves - want vs. should
• New Years Resolution
• Keep a good diet
• Exercise twice a day 630a and 630p
• Learning 5 Chinese characters every day in this
  year (Then I will learn 1800 Chinese characters a
  year later enough for basic Chinese
  communications)
• Stop watching TV
• When spending a weekend in Las Vegas, I will
  budget my gambling within 150 no more
  absolutely.
• Quitting from alcohol, drug, or cigarette
• Internal inconsistencies between transient
  concerns and long-term self-interest
• Conrad Hiltons marriage with Jaja

4
Life-long Welfare Planning

• Your economic status of your life
• 0-18 Family sponsored
• 19-24 many self-support or by loan
• 25-65 Working age
• 66-? Retired
• How to control you expenses when you are at the
  working age in order to guarantee life quality
  after you retired?

Life quality
Income
18 24 65
5
Advices from Different Research Disciplines to
Multiple Selves

• Decision Theory
• Howard Raiffa
• Formalizing identification Weighting multiple
  criteria
• should can confront want with its limited
  perspective
• Negotiation Research
• Schelling
• It is hard for two selves to negotiate if they
  are not present simultaneously as there is no
  internal mediator

6
Positive Illusions

• Unrealistically positive views of the self
• Better than others on a variety of desirable
  attributes
• Unrealistic optimism
• Judge bias that leads people to believe that
  their futures will be better and brighter than
  those of other people
• The illusion of control
• Falsely believe that ability to control
  uncontrollable events
• Self-serving attributions
• Tendency to take a disproportionately large share
  of the credit for collective successes and to
  accept too little responsibility for collective
  failures.

7
Some Good Side of Positive Illusions?

• Good side adaptive role
• Increase personal commitment
• Help individuals persist at difficult tasks
• Facilitate coping with aversive and
  uncontrollable events
• Allow us to maintain cognitive consistency,
  belief in a just world, and perceived control
• Bad side
• Cause people to temporarily fool themselves
  short-term benefit with long-term costs
• Negative impact on learning and the quality of
  decision making
• Contribute to conflict and discontent

8
Self-Serving Reasoning

• A real story in a developing country A villager
  asked his relative living in town Why people
  living in town are not poisoned to dead?
• City dwellers in developing countries complain
  that there is no enough control to the use of
  chemicals in farms that supply their food every
  day. Many of them have the experience of being
  poisoned by the food because of the pollution.
• It is true that farmers have been using too much
  chemicals to grow their crops, vegetables, fruit,
  etc. However, they complain that people in cities
  exploited too much from them. Also they created
  too much pollutions. Also those poisoning
  chemicals were produced by people living in
  cities
• Self-Serving reasoning cause the tendency to
  select standards of evidence in self-serving way.
• Different parts of the US legal system use
  different standards of evidence
• A speeding ticket can be issued if a driver is
  driving one mile above the speed limit according
  to the regulation. Do you know anyone have ever
  be ticketed because of speeding for one mile
  over? Why?

9
Affective Influences on Decision Making How
emotion drives behavior

• Influences
• People in good moods are more optimistic and
  people in bad moods are more pessimistic
• Fear and anxiety create risk-averse behavior
• Happy individuals may be less motivated to expend
  cognitive effort (system 2 thinking) and more
  likely to rely on heuristic processing (system 1
  thinking)
• Regret
• Silver-medal winners are less happy with their
  achievement than the bronze-medal winners in the
  Olympic Game
• You have been buying lotteries. Your never got
  any good luck. Each time you check the number
  there is less than a half of numbers in your
  lottery tickets match the winning number. So you
  feel ok it is obviously not a easy thing.
  However, one day you realized that you are so
  close to be the winner only one number miss the
  winning number. You start to feel upset and
  regret.

10
Case catching a flight also see p77-78 ()

• I arrived at San Jose International Airport from
  Tokyo and next connecting flight is departing in
  90 minutes according to the schedule. However, it
  took me 45 minutes to get through the immigration
  check because of the long line. Then I spent
  another 30 minutes at the Custom check I was
  asked to open all luggage for inspection I was
  an unlucky person among all passengers. Will I
  be able to catch the connecting flight?
• How do you feel?
• What are the possible outcomes of this situation?
• Missing the last flight back to Dallas
• The flight was late I caught it
• Others?