Stevens Institute of Technology
Howe School of Technology Management
Syllabus
EMT 635
Managerial Judgment and Decision Making
Semester: 2014
Day of Week/Time:
Instructor Name & Contact Information:
James W. Smither, Ph.D.
Babbio
Tel: 908.642.2678/ 215.951.1797
Office Hours:
Before or after class
Class website:
jwsmither@msn.com
Course Description
This course acquaints students with the research and principles of judgment and decision
making. Most of the material covered is about understanding and improving the
judgment and decision making processes of managers and other professionals.
Understanding decision making involves examining how decision makers think about
difficult problems and characterizing the limitations of human decision making ability.
By understanding how decisions are made, we can provide guidelines and techniques for
overcoming limitations and improving the quality of decision making. This includes
understanding statistically-based decision making, the psychological aspects of decision
making and rational approaches to decision making. The goal is to provide insights and
tools that will enable students to support and improve their own decision making as well
as to understand the decision making of others.
Course Objectives
The objective of the course is to enable students to identify the most common and
widespread decision making biases and errors in their workplaces and in their own dayto-day business and personal lives. The course also helps students develop skills that can
minimize such biases and errors (e.g., by using rational models, identifying when ‘gut’
decisions are and are not likely to helpful, creating team psychological safety, and
negotiating effectively in distributive and integrative contexts.
Additional learning objectives include the development of:
Communication Skills: Students develop and present original case studies of major
decisions in class which incorporate some of the major issues covered in the course and
demonstrate their understanding of the principles of judgment and decision making.
Team Skills: Students both analyze and practice decision making using realistic case
studies and role playing exercises. The cases and exercises allow students to demonstrate
understanding of influences on judgment and decision-making and how effective
decisions are made by individuals and groups.
Ethics: The course covers fairness in decision making, drawing the distinctions among
distributive, procedural, and interactional justice (using compensation decisions as an
example). Second, it includes discussion on bounded ethicality, which is the idea that
many unethical decisions can arise due to biases that are outside of our conscious
awareness. To reinforce this concept, students complete an implicit association test,
which reveals biases that are the ‘thumbprint of our culture’ despite our explicit desire to
avoid such biases.
Course Outcomes:
After taking this course, the student will be able to:
1.
2.
3.
4.
Understand explain major approaches to judgment and decision making
Analyze decisions from a statistical and rational model perspective
Understand how bounded rationality and satisficing affect managerial decisions
Understand how interpersonal and cognitive processes affect decisions and
judgments.
5. Apply models to make decisions under uncertainty and crisis
6. Understand and apply principles of conflict and negotiation
Pedagogy
The course will employ lectures, class discussions, and in-class exercises. A series of
exercises are used to illustrate principles of judgment and decision making. Exercises
include the taxi problem (an illustration of Bayesian reasoning), a group decision-making
exercise, the prisoner’s dilemma, a two-person negotiation exercise, and a variety of case
examples.
Students must complete two papers. The first requires analyzing the decision-making
failures (as well as other factors) that led to the airline disaster at Tenerife and the 1996
Mt. Everest disaster. The second requires analyzing the decision-making processes
during the Cuban missile crisis.
The final project requires developing an original case study of a decision, including the
context, background, decision, and aftermath. Students must use decision-making
concepts from the course to describe and analyze the case. Each student will make a
formal presentation of the case and will answer questions from the class and professor.
Required Text
Text: Bazerman, M.H., & Moore, D.A. (2009). Judgment in Managerial Decision
Making, 7th ed., Wiley.
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Required Readings
1. Belkin, L. (2002). The odds of that. The New York Times Magazine, August 11.
2. * Bikhchandani, S., Hirshleifer, D., & Welch, I. (1998). Learning from the
behavior of others: Conformity, fads, and informational cascades. The Journal of
Economic Perspectives, 12, 151-170.
3. Bruck, C. (2009). Angelo’s ashes. The New Yorker, June 29.
4. Dana, J., & Dawes, R.M. (2004). The superiority of simple alternatives to
regression for social science predictions. Journal of Educational and Behavioral
Statistics, 29, 317-331.
5. * Eden, D., & Shani, A. B. (1982). Pygmalion goes to boot camp: Expectancy,
leadership, and trainee performance. Journal of Applied Psychology, 67(2), 194199.
6. * Folger, R., & Konovsky, M.A. (1989). Effects of procedural and distributive
justice on reactions to pay raise decisions. Academy of Management Journal, 32,
115-130.
7. * Frederick, S. (2005). Cognitive reflection and decision making. Journal of
Economic Perspectives, 19, 25-42.
8. * Galotti, K. M. (2007). Decision structuring in important real-life choices.
Psychological Science, 18, 320-325.
9. Gawande, A. (2007). The checklist. The New Yorker.
10. * Gilovich, T., Vallone, R., & Tversky, A. (1985). The hot hand in basketball: On
the misperception of random sequences. Cognitive Psychology, 17, 295-314.
11. Gladwell, M. (2009, July 27). Cocksure: Dept. of finance. The New Yorker,
85(22), 24.
12. * Gladwell, M. (2008). The ethnic theory of plane crashes. In M. Gladwell
(author), Outliers: The story of success (pp. 177-223). New York: Little, Brown,
and Company.
13. Gladwell, M. (2004). Personality plus. The New Yorker, September 20.
14. Gladwell, M. (2002). Blowing Up. The New Yorker. April 22 and 29, 162-173.
15. Groopman, J. (2007). What’s the trouble? The New Yorker, January 29.
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16. Hardman, D. & Harries, C. (2002). How rational are we? The Psychologist, 15(2),
76-79.
17. Hyashi, A.M, (2001, February). When to trust your gut. Harvard Business
Review, 59-65.
18. * Kruger, J., Savitsky, K., & Gilovich, T. (1999). Superstition and the regression
effect. Skeptical Inquirer, 23, 24-29.
19. Lehrer, J. (2008, July 28). The eureka hunt. The New Yorker, 40-45.
20. * Lovallo, D., Viguerie, P., Uhlaner, R., & Horn, J. (2007, December). Deals
without delusions. Harvard Business Review, 92-99.
21. * Milkman, K.L., Chugh, D., & Bazerman, M.H. (2009). How can decision
making be improved? Perspectives on Psychological Science, 4, 379-383.
22. * Milkman, K.L., Rogers, T., & Bazerman, M.H. (2008) Harnessing our inner
angels and demons: What we have learned about want/should conflicts and how
that knowledge can help us reduce short-sighted decision making. Perspectives on
Psychological Science, 3, 324-338.
23. Mishlove, J. To err is human. In ‘The Roots of Consciousness.’
http://www.williamjames.com/Science/ERR.htm.
24. * Myers, D.G. (2002, November/December). The powers and perils of intuition.
Psychology Today, 42-52.
25. * Probst, G., Raisch, S. (2005). Organizational crisis: The logic of failure.
Academy of Management Executive, 19, 90-105.
26. Reilly, R.R. (2010). Introduction to probability for decision making.
27. Roberto, M.A., & Carioggia, G.M. (2003). Mount Everest – 1996. Harvard
Business School.
28. * Shih, M., Pittinsky, T. L., & Ambady, N. (1999). Stereotype susceptibility:
Identity salience and shifts in quantitative performance. Psychological Science,
10, 80-83.
29. * Staw, B.M., & Hoang, H. (1995). Sunk costs in the NBA: Why draft order
affects playing time and survival in professional basketball. Administrative
Science Quarterly, 40, 474-494.
30. * Smithson, M. (2009). Psychology’s ambivalent view of uncertainty. In G.
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Bammer & M. Smithson (Eds.), Uncertainty and risk: Multidisciplinary
perspectives (pp. 205-217). Earthscan Publications.
31. Surowiecki, J. (2007, November 19) Striking out. The New Yorker.
32. * Willis, J., & Todorov, A. (2006). First impressions: Making up your mind after
a 100-ms exposure to a face. Psychological Science, 17, 592-598.
33. Begley, S. (2010, August 5). The limits of reason: Why evolution may favor
irrationality. Newsweek,
http://www.newsweek.com/search.html?q=The+limits+of+reason
Assignments
The course will emphasize class discussion focused around the exercises and the analysis
of the text and other assigned readings. Students are expected to be prepared to discuss
the assigned readings as well as concepts and examples in the text. Two papers (each
analyzing decision making cases) are assigned plus an original final case study.
Class Participation
To enhance the learning experience for everyone, all students are expected to participate
in class discussions and team exercises. Attendance is an important component of this
grade. In addition, each student will prepare and deliver a brief presentation on one of
the assigned readings.
Assignment
Grade
Percent
Case Study I
25%
Case Study II
25%
Final Presentation
35%
Article Presentation and Class Participation
15%
Total Grade
100%
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Ethical Conduct
The following statement applies to all students taking Stevens courses, on and off
campus.
“Cheating during in-class tests or take-home examinations or homework is, of course,
illegal and immoral. A Graduate Academic Evaluation Board exists to investigate
academic improprieties, conduct hearings, and determine any necessary actions. The
term ‘academic impropriety’ is meant to include, but is not limited to, cheating on
homework, during in-class or take home examinations and plagiarism.”
Consequences of academic impropriety are severe, ranging from receiving an ‘F’ in a
course, to a warning from the Dean of the Graduate School, which becomes a part of the
permanent student record, to expulsion.
Reference:
The Graduate Student Handbook, Academic Year 2003-2004 Stevens
Institute of Technology, page 10.
Consistent with the above statements, all homework exercises, tests and exams that are
designated as individual assignments MUST contain the following signed statement
before they can be accepted for grading.
_______________________________________________________________________
I pledge on my honor that I have not given or received any unauthorized assistance on
this assignment/examination. I further pledge that I have not copied any material from a
book, article, the Internet or any other source except where I have expressly cited the
source.
Signature _______________________________________ Date: _____________
Please note that assignments in this class may be submitted to www.turnitin.com, a webbased anti-plagiarism system, for an evaluation of their originality.
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Course Schedule
Session
Topic
Readings and other activities
Session 1
(1/18)
Course
overview
Power Point slides
Readings: 1, 4, 10, 14, 26
Prisoner’s dilemma game
Questions for common biases and framing in decision making
Session 2
(2/1)
Session 3
(2/8)
Session 4
(2/22)
Randomness
and statistical
models
Common biases
Framing and the
reversal of
preferences
Non-rational
escalation of
commitment
Group decision
making
Session 5
(3/8)
Motivational
and emotional
influences on
decision making
Session 6
(3/22)
Fairness and
ethics in
decision making
Session 7
(4/7)
Session 8
(4/26)
(4/30)
Intuition
Negotiations
Improving
decision making
Power Point slides
Bazerman & Moore Chapters 1 and 2
Readings: 7, 8, 9, 15, 16, 18, 20, 23, 30
Power Point slides
Bazerman & Moore Chapter 4
Readings: 22, 29
Tenerife video
Power Point slides
Readings: 12, 25, Mt. Everest case (27)
Leaderless group discussion
Winter survival exercise
Power Point slides
Bazerman & Moore Chapter 5
Readings: 2, 3, 5, 11, 13, 28, 32
Tenerife and Mt. Everest paper due
Class exercise (handout)
Implicit association test (IAT)
https://implicit.harvard.edu/implicit/
Power Point slides
Bazerman & Moore Chapter 7
Readings: 6, 17, 19, 24, 31
Cuban missile crisis video
Power Point slides
Bazerman & Moore Chapters 9 and 10
Papa Pagone’s negotiation
Arak-Barkan negotiation
Student case presentations
Power Point slides
Bazerman & Moore Chapter 11
Readings: 21, 33
Student case presentations
Paper on Cuban missile crisis due
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