Test Bank for Judgment in Managerial Decision Making, 8th Edition, Max H. Bazerman, Don A. Moore

Test Bank for Judgment in Managerial Decision Making, 8th Edition, Max H. Bazerman, Don A. Moore Multiple choice 1. According to the “multiple-selves” theory, if an online DVD rental service could offer same-day deliveries, so that people who order a movie receive it the same day, what change is likely to happen to the rental profile? a. More documentaries and art films will be rented and less comedies and action movies. b. More comedies and action movies will be rented and less documentaries and art films. c. More documentaries and art films will be rented, but less will actually be watched. d. More comedies and action movies will be rented, but less will actually be watched. Ans: b Response: p. 108 2. Self-serving reasoning causes people to pay less critical attention when assessing: a. Favorable information. b. Ambiguous information. c. Probabilities. d. Threatening information to their sense of self. Ans: a Response: p. 113 3. Which emotion may decrease the endowment effect, causing an owner of a good to lower his or her selling price? a. Anger. b. Disgust. c. Happiness. d. Fear. Ans: b. Response: p. 115 4. A senator wants to pass a bill to implement a substantial increase in the tax on gasoline. Which feature is most likely to help the bill’s chances of being passed? a. To frame the bill in terms of potential gains, instead of potential losses. b. To emphasize that people today do not do enough to reduce gas consumption, so as to tap other senator’s self-worth. c. To propose that the bill would come into effect in the future, not immediately. d. To emphasize the fairness of the bill, so as to tap other’s senators fairness perceptions. Ans: c Response: p. 108 5. Which of the following helps promote more rational decision making? a. Standards of comparison b. Focus on salient attributes c. The “multiple-selves” approach d. Positive, rather than negative affect Ans: a Response: p. 107 True/False 6. Cognitive neuroscience research has refuted the “multiple-selves” theory, finding that both short-term and long-term gratifications activate the same regions in the brain. Ans: False. Response: p. 106 7. Relative to the present time period, people tend to view all gains and losses in the future to be worth less than they would be in the present. Ans: True. Response: p. 108 8. People’s assessments of fair allocation of resources are influenced primarily by the importance of attributes affecting what is fair. Ans: False. Response: p. 112 Fill-in-the-Blank 9. A rational decision maker would discount the future using ___________ discounting. Ans: exponential. Response: p. 107 10. __________ is a negative emotion that shares many features with happiness, such as increased confidence and decreased sensitivity to risk. Ans: anger. Response: p. 114 11. Sadness has been found to focus one’s attention to _______________. Ans: the self. Response: p. 114 Short Answer 12. According to the Multiple-Selves theory, what is the subject of disagreement between the two “selves”? Ans: one of the “selves” is in favor of a decision that provides immediate gratification, while the other one favors an alternative that would provide greater future rewards. Response: p. 106 13. What explanation was given to the fact that silver-medal winners often appear less happy with their achievement than bronze-medal winners? Ans: people display counterfactual thinking. Silver medal winners can’t help imagining that they almost won a gold medal, while bronze medalists are happy with getting any medal at all. Response: p. 116 Essay 14. How do the two selves in the “multiple-selves” theory interact in evaluations of an option that bears short-term gratification and long-term costs? Ans: if the option of a short-term reward that has long-term costs is evaluated by itself, the “want” self makes an immediate assessment that the option seems appealing. when that shortterm desire is compared against the choice to resist the indulgence’ the “should” self is empowered by the ability to evaluate and compare the relative value of each. Response: p. 107 15. Describe one proposed approach to dealing with the conflict between the “want” self and the “should” self. Ans: Schelling and Thaler propose that the “should” self develop advance schemes to corral, coopt, or control the “want” self. For example, make inflexible pre-commitments. Thaler and Shefrin propose that the “should” self search for ways to bring the interests of the two selves into alignment. Raiffa proposed to acknowledge this conflict as an error in judgment made by one of the selves, and to question each self to find out which of them is making the error. The authors recommend to develop a rational negotiation strategy for dealing with the “want” self, and to give the “want” self more voice in the negotiation, in order to increase the likelihood of compliance with what will be decided. Response: p. 110-111 16. What are the three criteria on negotiating between the “want” self and the “should” self? Ans: first, the two sides must reach an agreement in order for the “want” self to comply with the decision that was made. Second, the agreement should be Pareto efficient, meaning that there is no other agreement that both the “want” self and the “should” self prefer over it. Third, the “should” self must not push for an agreement that is outside the bargaining zone, meaning that the terms must be acceptable to the “want” self. Response: p. 111