How a set of psychological traps snare decision makers


Assignment:

1. When RIM decided to incorporate personal apps into the BlackBerry, developers were required to use the company's Java based operating system, which had been created in the 1990s. In addition, they were required to submit apps for prior approval. Several apps- including Instagram and Tumblr-went elsewhere. Explain this problem as a problem in bounded rationality. Judging from what you know about RIM from the case, in what other ways would you say that RIM decision makers were hampered by bounded rationality?

2. Hersh Schefrin, a pioneer in the behavioral aspects of financial decision making, studies how a specific set of psychological traps snare decision makers, causing them to make inferior decisions. [Two) of the most common are excessive optimism land] overconfidence. People learn to be excessively optimistic and overconfident. This means that successful people over-estimate their past successes, which feeds these biases Judging from the details of the case, show how these two forms of "bias" affected decision making at RIM. How might RIM's "inferior decisions" have been avoided if executives like Lazaridis and Balsillie had applied the steps in rational decision making?

3. The workplace is clearly changing. The barrier between work and home has been eroded, and if people are going to have to be constantly connected, they at least want to use their own phones. Companies have quickly come to love consumerization, too: A recent study.

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Operation Management: How a set of psychological traps snare decision makers
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