Perception

Meaning and Importance of Perception

• The way we sense the world around us.

 Sub-process of perception

External Confrontation Registration

environment

Interpretation

Consequence Behavior Feedback

 Perceptual Selectivity
• Selecting only a few stimuli depending upon:
– Experience
– Motives
 Factors Affecting Perception
• External: Intensity, size, color, contrast etc.
• Internal: learning, expectations, motivation,
personality
Complete the following:
 Social Perception
• Process of interpreting information about
another person
 Stereotyping
• Process of categorizing or labeling people on
the basis of a single attribute.
 Halo Effect
• a type of cognitive bias
• generalization from the perception of one
dominating personality trait to the whole
personality
 Attribution Theory
• We attribute causes to behavior based on our
observations of certain characteristics of that
behavior
Attribution Process
 Attribution Errors
• Fundamental Attribution error: Underestimating the influence of external
factors and overestimating the influence of internal factors while making
judgments about the behavior of others
Ex- Your friend fails an exam that both of you have given. You begin to
think that she's more involved in activities other than studying; that she is
not interested in studies. However, there may be circumstances at home
that do not permit her to study enough for any upcoming test.
• Self Serving Bias: Attributing own successes to internal factors and put the
blame for failures on external factors
Ex- A company attributes its income/profit achieved to its own ability or
effort and blames bad luck and unproductive workers for not working up
to the mark
• Self-fulfilling Prophecy (Pygmalion effect): The perception that the greater
the expectation placed on an individual, the greater the result that
individual will attain
Ex- Sales targets vs actual outcome
 The Pygmalion effect, or Rosenthal effect, is the
phenomenon whereby higher expectations lead to an
increase in performance.
 Perception and Decision-making
• Decision-making by an individual is in response to a
problem
• Its need arises when there is a discrepancy between
current state and desired state
• It requires the decision-maker to consider various
alternative courses of action and decide upon the best
option to solve the problem
• Awareness of the existence of a problem and
realization of the need to make a decision to solve the
problem are matters of perception
 Rational Decision-making Steps
• It describes how individuals should behave in
order to maximize some outcome by making
consistent, value maximizing choices within
specified constraints. The steps are:
Identify the Allocate
Define the
decision weights to the
problem
criteria criteria

Select the
Evaluate the Develop the
best
alternatives alternative
alternative
 Bounded Rationality

• Individuals make decisions by constructing simplified models

that extract the essential features from problems without
capturing all their complexity
• When faced with a complex problem, most people respond by
reducing the problem to a level at which it can be readily
understood
• People satisfice; that is, they seek solutions that are
satisfactory and sufficient
• They seek solutions that are satisfactory and sufficient to
operate within the confines of bounded rationality
 Ethics in Decision-Making

• The three ethical decision making criteria are:

– Utilitarianism: It is a system in which decisions are
made to provide the greatest good for the greatest
number
– Whistle-blowers: They are individuals who report
unethical practices by their employer to outsiders
– Behavioral ethics: It is an area of analyzing how
people actually behave when confronted with
ethical dilemmas
 Errors in Decision Making

1. Overconfidence Bias: Overconfident in taking

decision
2. Anchoring Bias: Fixate on initial information, from
which one then fails to adequately adjust for
subsequent information
3. Confirmation Bias: Seek out information that
reaffirms past choices and to discount information
that contradicts past judgments
4. Availability Bias: Base judgments on information
that is readily available
 Errors in Decision Making (Continued)

5. Escalation of Commitment: Increased commitment to a

previous decision in spite of negative information
6. Randomness Error: Belief about the ability to predict the
outcome of random events
7. Risk Aversion: It is the tendency to prefer a sure gain of a
moderate amount over a riskier outcome, even if the riskier
outcome might have a higher expected payoff
8. Hindsight Bias: It is the tendency to believe falsely, after an
outcome of an event is actually known, that one would have
accurately predicted that outcome
 Reducing Biases and Errors

• Focus on Goals
• Look for information that disconfirms your beliefs
• Don’t try to create meaning out of random events
• Increase your options