Undergraduate Honours Theses
Decision makers who evaluate complex alternatives in real-world decision-making contexts are susceptible to cognitive biases, which can influence judgments, and may result in irrational decisions. Engaging in deliberate, systematic evaluation may reduce the extent to which biases pervade rational judgments (Kahneman, 2011). Previous studies have demonstrated that the deliberate consideration of multiple alternatives is an effective strategy to reduce biases (Lord, Lepper, & Preston, 1984). However, there is limited research on the effects of deliberate analysis on judgments in business decision-making. The present study examines whether the extent of deliberate analysis would elicit differences in the degree to which judgments changed across the decision-making process. Undergraduate students (N = 32) evaluated high- and low-risk hypothetical business scenarios involving decisions between two choice alternatives. Perceived behavioural intentions to pursue the decisions were assessed at two points: after reading the scenario, and after deliberate analysis of the pros and cons for one, or both alternatives. The results suggest that engaging in comparative analysis, as opposed to selective analysis of a single alternative, causes significantly larger changes in initial intuitive evaluations; this strategy is particularly effective in situations concerning high risk. The practical importance of these results for multifaceted business decision-making in assessed, particularly with regard to the use of deliberate comparative analysis as a strategy to decrease risk aversion.