A632.9.3.RB - Role of Emotion in Decision Making
Decision overconfidence is a major challenge that confronts decision makers. Overconfidence in decision making results when you believe you have more accurate information than you actually have; when you think you have a complete picture, but you only have part of it (Riordan, 2013). Decision overconfidence results from overestimating the accuracy and depth of knowledge about the situation, ignoring disconfirming information, or feeling overly assured from similar situations in the past (Riordon, 2013). Overconfidence in decision making can result in difficulties such as escalation of commitment bias, in which resources continue to be committed to a decision despite it becoming obvious that it is a failing course of action (Straw & Ross, 1987). Professor Baba Shiv of Stanford University argues that there are a few positive aspects to decision confidence. The first is from the perspective of the organization. As organizations develop customer confidence they derive benefi