The Hidden Traps in Decision Making - John S. Hammond, Ralph L. Keeney, & Howard Raiffa

Making decisions is the most important job of any executive. It's also the toughest and the Riskiest. Bad decisions can damage a business and a career, sometimes irreparably.
Examples of the latter include the tendencies to stick with the status quo, to look for evidence confirming one's preferences, and to throw good money after bad because it's hard to admit making a mistake.

Well-documented psychological traps that are particularly likely to undermine business decisions:

1. The Anchoring Trap
When considering a decision, the mind gives disproportionate weight to the first information it receives. Initial impressions, estimates, or data subsequent thoughts and judgements.

2. The Status-Quo Trap
Decision makers display a strong bias toward alternatives that perpetuate the status quo.
Other experiments have shown that the more choices you are given, the more pull the status quo has. More people will, for instance choose the status quo when there are two alternatives to it rather than one: A and B instead of just A. Why? Choosing between A and B requires additional effort; selecting the status quo avoids that effort.

3. The Sunk-Cost Trap.
Another of our deep-seated biases is to make choies in a way that justifies past choices even when the past chices no longer seem valid

4. The Confirming-Evidence Trap
There are two fundamental psycological forces at work here. The first is our tendency to subconsciously decide what we want to do before we figure out why we want to do it. The second is our inclination to be more engaged by things we like than by thngs we dislike-a tendency well documented even in babies. Naturally, then, we are drawn to information that supports our subconscious leanings.
We tend to subsconsciously decide what to do before figuring out why we want to do it

5. The Framing Trap
a. Frames as gains versus losses.
b. Framing with different reference points.

6. The Estimating & Forcasting Traps.

7. The Overconfidence Trap

8. The Prudence Trap
"JUST BE SAFE" adjustments

9. The Recallability Trap
A dramatic or traumatic event in your own life can also distort your thinking

Forewarned Is Forearmed
The higher the stakes, the higher the risk of being caught in a psychological trap.
The psychological miscues cascade, making it harder and harder to choose wisely