Perception and Individual Decision

Making

John Peter, LIAC, Loyola

Tell me, which one is lengthy?

Muller Iyer Illusion

Food Survey
There was a world-wide survey conducted by the UN.
The only question asked was... : "Would you please give your
honest opinion about solutions to the food shortage in
the rest of the world?” The survey was a huge failure
because...:
Result
1. In Africa they didn't know what "food" means.
2. In Eastern Europe they didn't know what "honest"
means.
3. In Western Europe they didn't know what
"shortage" means.
4. In China they didn't know what "opinion" means.
5. In the Middle East they didn't know what "solution"
means.
6. In South America they didn't know what "please"
means.
7. In the USA they didn't know what "the rest of the
world" means
Perception
A process
by which individuals organize and interpret their
sensory impressions

in order to give meaning to their environment.

The world as it is perceived is the world that is behaviorally

important.
Perception and Behaviour
People’s behavior is based on their perception of
what reality is, not on reality itself
The world as it is perceived is the world that is
behaviorally important

Cockroach in a restaurant
 Perception

The process of organizing and interpreting

information, enabling us to recognize meaningful
objects and events.
Perceptual Process Model
Environmental Stimuli

Feeling Hearing Seeing Smelling Tasting

Selective Attention

Organization and
Interpretation

Emotions and
Behavior
PERCEPTION-WHO ARE
YOU?
PERCEPTION OF SELF
■ Self esteem (how
you THINK you
are)
– Feedback
from others
– Social
comparison
– Reflected
appraisal
 Gestalt Principles of Visual Perception

❖ Gestalt – Movement in experimental

psychology
❖ We perceive objects as well-
organized patterns rather than
separate components.
❖ “The whole is greater than the sum of
it’s parts.”
❖ Based on the concept of “grouping”.
Gestalt Principles of Visual Perception

W.E. Hill, 1915 German postcard, 1880

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organization on stimuli
Gestalt Principles of Visual Perception

Three Main Principles:

❖ Grouping (proximity, similarity,

continuity, closure)
❖ Goodness of figures
❖ Figure/ground relationships
 Gestalt Principles of Visual Perception
Grouping:
Law of Proximity
 Gestalt Principles of Visual Perception

Grouping:
Law of Similarity
 Gestalt Principles of Visual Perception

Grouping:CJArun/OB
LawJIMofNovSimilarity:
2016 Shape, Scale, Color
Gestalt Principles of Visual Perception

Law of Good Continuation, or

Continuity
Objects arranged in either a
straight line or a smooth curve
tend to be seen as a unit.
 Gestalt Principles of Visual Perception

Law of Closure
Gestalt Principles of Visual Perception

Law of Common Fate

elements that are moving together
tend to be perceived as a unified
group.
 Factors influence Perception

Perceiver
Attitudes – Motives –Interests –
Experience - Expectations

Situation the target

Time – Work setting – Social
Novelty – Motion – Sounds – Size
setting
– Background – Proximity -
Similarity

Perception
Elements of Perception

■Sensation
■Absolute threshold
■Differential threshold
■Subliminal perception
 Sensation

■ The immediate and direct response

of the sensory organs to stimuli.
■ A perfectly unchanging
environment provides little to no
sensation at all!
Differential Threshold

■ Theminimal difference that can be

detected between two similar
stimuli
 Weber’s Law

■ thestronger the initial stimulus, the

greater the additional intensity
needed for the second stimulus to
be perceived as different
 Subliminal Perception

■ Perception of very weak or

rapid stimuli received
below the level of
conscious awareness
Aspects of Perception

Selection

Organization

Interpretation
 Perceptual Selection
■ Conscious and unconscious
screening of stimuli
Person Perception: Attribution Theory
Suggests that perceivers try to “ attribute ” the observed
behavior to a type of cause:

Internal – behavior is believed to be under the personal

control of the individual

External –the person is forced into the behavior by outside

events/causes
 Person Perception: Making Judgments
About Others
Attribution Theory

An attempt to determine whether an individual’s behavior is internally or externally caused

The Attribution Process

Attribution of
Observation Interpretation
Cause

Distinctiveness
(High or Low)

Observation of Consensus Internal or External

Behavior (High or Low) causes

Consistency
(High or Low)
 Kelley’s Model of Attribution
Basic Premise: An attribution is based on the consensus, distinctiveness, and
consistency of the observed behavior.
Consensus: Involves comparing an individual’s behavior with that of his or her peers.
Low consensus indicates an individual is different from peers.

Distinctiveness: Involves comparing a person’s behavior or accomplishments on one

task with the behavior or accomplishments from other tasks.
Highly distinctive behavior or results represents a situation where the current
behavior or result is significantly different from typical behavior or results on other
tasks.
Consistency: Involves comparing a person’s behavior or accomplishments on a given
task over time.
- High consistency implies that a person performs a certain task the same, time
after time.
Predictions: Internal or personal attributions are made when a behavior is associated
with low consensus and distinctiveness, and high consistency.
- External or environmental attributions are made when a behavior is related with
high consensus and distinctiveness, and low consistency.
Determination of Attribution

3-36
 Attribution Errors
Fundamental Attribution Error
The tendency to underestimate the influence of external
factors and overestimate that of internal factors.

Self-Serving Bias
Occurs when individuals overestimate their own (internal)
influence on successes and overestimate the external influences
on their failures.
 Frequently used shortcuts in Making
Judgments About Others
Frequently Used Shortcuts in Judging Others

People selectively interpret what they see on the basis of their interests,
Selective Perception background, experience, and attitudes

Drawing a general impression about an individual on the basis of a single

Halo Effect characteristic

Evaluation of a person’s characteristics that are affected by comparisons with

Contrast Effects other people recently encountered who rank higher or lower on the same
characteristics

Judging someone on the basis of one’s perception of the group to which that
Stereotyping person belongs – a prevalent and often useful, if not always accurate,
generalization

A form of stereotyping in which members of a group are singled out for intense
Profiling scrutiny based on a single, often racial, trait
38
Perceptual Bias and Errors in
DecisionMaking
Leniency: A personal characteristic that leads an individual to
consistently evaluate other people or objects in an extremely
positive fashion.
Primacy: First impressions
Recency Effect: The tendency to remember recent
inforamtion. Most recent information dominates
perceptions. If the recent information is negative, the person
or object is evaluated negatively.
Projection: Believing other people are similar to you
The Stereotyping Process
Develop categories Professors are
and assign traits absent-minded

Assign person to category Our instructor

based on observable info is a professor

Assign category’s traits Our instructor is

to the person absent-minded
Improving Perceptual Accuracy
Diversity
Initiatives

Know Improving Empathize

Yourself Perceptual With Others
Accuracy
Compare Postpone
Perceptions Impression
With Others Formation
Self-Fulfilling Prophecy Cycle
Supervisor
forms
expectations

Employee’s Expectations
behavior matches affect supervisor’s
expectations behavior

Supervisor’s
behavior affects
employee
 The Link Between Perception and
Individual Decision Making

A perceived discrepancy between the current state of affairs and a desired

Problem state

Decision Choices made from among alternatives developed from data

All elements of problem identification and the decision making process are
Perception Linkage influenced by perception

Problems must be recognized - Data must be selected and evaluated

43
Rational Decision-Making
Model1. Define the problem.
2. Identify the decision criteria.
3. Allocate weights to the criteria.
4. Develop the alternatives.
5. Evaluate the alternatives.
6. Select the best alternative.

Seldom actually used: more of a goal than a

practical method
Assumptions of the
Complete knowledge of the situation
Model
All relevant options are known in an unbiased manner
The decision-maker seeks the highest utility
Bounded Rationality
The limited information-processing capability of human beings
makes it impossible to assimilate and understand all the
information necessary to optimize

So people seek solutions that are satisfactory and sufficient,

rather than optimal (they “satisfice”)

Bounded rationality is constructing simplified models that extract

the essential features from problems without capturing all their
complexity
Decision Making in Bounded Rationality
Simpler than rational decision making, composed of three steps:

1. Limited search for criteria and alternatives – familiar

criteria and easily found alternatives
2. Limited review of alternatives – focus alternatives, similar
to those already in effect
3. Satisficing – selecting the first alternative that is “good
enough”
Intuitive Decision Making
An non-conscious process created out of
distilled experience
Increases with experience
Can be a powerful complement to rational
analysis in decision making
 The Role of Intuition

• Uncertainty
• Limited Facts and Data
• Time
• Less Scientific Predictability
 Decision-Making Styles
High
Tolerance for Ambiguity

Analytic Conceptual

Directive Behavioral

Low

Rational Way of Thinking Intuitive

 Decision Making in Organizations

Decision Making Approaches

Rational Decision- The “perfect world” model: assumes complete information, all options known,
Making and maximum payoff

Six-step decision-making process

The “real world” model: seeks satisfactory and sufficient solutions from
Bounded Reality limited data and alternatives

A non-conscious process created from distilled experience that results in

Intuition quick decisions

Relies on holistic associations - Affectively charged “engaging the emotions”

51
 Decision Making in Organizations

Common Biases and Errors in Decision Making

Believing too much in our own ability to make good decisions – especially
Overconfidence Bias when outside of own expertise

Using early, first received information as the basis for making subsequent
Anchoring Bias judgments

Confirmation Bias Selecting and using only facts that support our decision

Availability Bias Emphasizing information that is most readily at hand (Recent – Vivid)

52
 Decision Making in Organizations

Common Biases and Errors in Decision Making

Escalation of Increasing commitment to a decision in spite of evidence that it is wrong –

Commitment especially if responsible for the decision!

Randomness Error Creating meaning out of random events - superstitions

Highest bidder pays too much due to value overestimation

Winner’s Curse Likelihood increases with the number of people in auction

After an outcome is already known, believing it could have been accurately

Hindsight Bias predicted beforehand

53
 Decision Making in Organizations

Individual Differences

Personality Conscientiousness may effect escalation of commitment

Achievement strivers are likely to increase commitment

Dutiful people are less likely to have this bias

High self-esteem people are susceptible to self-serving bias

Gender Women analyze decisions more than men – rumination

Women are twice as likely to develop depression

54
 What About Ethics in Decision Making?

Three Ethical Decision Criteria

Utilitarianism Decisions made based solely on the outcome

Promotes efficiency and Can ignore individual rights,

productivity especially the marginalised

Rights Decisions consistent with fundamental liberties and privileges

Protects individuals from harm, Creates an overly legalistic work

preserves rights environment

Justice Imposing and enforcing rules fairly and impartially

Protects the interests of weaker 55

Encourages a sense of entitlement
members
The Three Components of Creativity

Expertise

Creativity
Task Creativity
Motivation Skills
Implications for Managers
Perception:
To increase productivity, influence workers’ perceptions of
their jobs

To improve decision making:

1. Analyze the situation
2. Adjust your decision approach
3. Be aware of biases and minimize their impact
4. Combine rational analysis with intuition
5. Try to enhance your creativity
Keep in Mind…
1. People have inherent biases in perception and
decision making
Understanding those biases allows for better prediction of
behavior
2. Biases can be helpful
Managers must determine when the bias may be
counterproductive
3. Creativity aids in decision making
Helps to appraise, understand, and identify problems
Ways to Improve Decision Making
1. Analyze the situation and adjust your decision making style
to fit the situation.
2. Be aware of biases and try to limit their impact.
3. Combine rational analysis with intuition to increase
decision-making effectiveness.
4. Don ’ t assume that your specific decision style is
appropriate to every situation.
5. Enhance personal creativity by looking for novel solutions
or seeing problems in new ways, and using analogies.
Toward Reducing Bias and Errors
Focus on goals.
 Clear goals make decision making easier and help to eliminate
options inconsistent with your interests.
Look for information that disconfirms beliefs.
 Overtly considering ways we could be wrong challenges our
tendencies to think we’re smarter than we actually are.
Don’t try to create meaning out of random events.
 Don’t attempt to create meaning out of coincidence.
Increase your options.
 The number and diversity of alternatives generated increase the
chance of finding an outstanding one.
Chapter Check-up: Decision Making
Michael has just discovered he is registered for two classes
at the same time and must make a decision about which
one to take this semester. He considers the professor
teaching this semester, the time of the class, and the
classes his friends are taking. He then considers his options
for when he can take each class again, as well as the costs
and benefits for taking each this semester versus later next
year. He then makes his decision. Michael has just engaged
in what?
 Chapter Check-up: Decision Making

In making his decision, Michael forgot to consider the

implications of the color of paint in the room where each
class was being offered. Given that room color can influence
mood, which can influence performance, why didn’t Michael
consider it?
Chapter Check-up: Decision Making

Michael engaged in the

rational decision making model,
and didn’t consider the paint color of the
rooms because he operates under the
confines of
bounded rationality.