MANAGERIAL BIASES

BY
BHAVESH
BRUNICA
DEEPAK
KANE
KIRAN
LISETTE
MONICA
GROUP - 3
OUR TOPICS . . .

Escalation of Commitment Bias

Hindsight Bias

Self Serving Bias

Sunk Costs Bias

Randomness Bias
Escalation of Commitment Bias
Definition
Tendency to invest additional resources in an apparently
losing proposition, influenced by effort, money, and time
already invested
The term is also used to describe poor decision-making
in business, government, information systems in general,
software project management in particular, politics, and
gambling
Ex-1 United States commitment to military conflicts
Ex-2 when parties engage in a bidding war
Hindsight Bias

Definition
It is the inclination to see events that have occurred
as more predictable than they in fact were before
they took place.

It has been shown that examining possible

alternatives may reduce the effects of this bias.
Self Serving Bias
Definition
It occurs when people attribute their successes to
internal or personal factors but attribute their failures to
situational factors beyond their control
The term "self-serving bias" is most often used to
describe a pattern of biased causal inference, in which
praise or blame depend on whether success or failure was
achieved
Ex-1 A student who gets a good grade
Ex-2 In Workplace
Sunk Costs Bias
Definition
These are costs that cannot be recovered once they have
been incurred
Sunk Costs greatly affect the decisions, because humans
are inherently loss aversive and thus normally act
irrationally when making economic decisions
Ex-1 Pre-ordering movie tickets

Overly optimistic probability bias

Randomness Bias

It’s the tendency people have to seek patterns where

none exist and to invent the existence of unjustified
causal relationships.

In simple terms, it’s the tendency of people to make

sense out of events which are so random in nature
that not enough should be read into them.
THANK YOU