The Research On Management Decision Of Individual Cognitive Bias

The most important question of modern management science is how to make high efficient decision under uncertainty environment. The environment what the enterprises are facing is more and more complicated and uncertainty. Management decision are facing extreme challenge. Instructed by cognitive psychology, behavioral economist are doing research on judgment and decision under uncertainly environment by the aspect of individual cognitive bias. This will help scholars of management do further research in this field and provide theoretic and practical evidence for scientific management decision.Management decision is explicit behavior, but cognition bias is a mechanism of implicit cognition of human's irrational decision process. There are lots of document about management decision nowadays, but the investigation of management decision by the aspect of cognition bias is the stage of initial step and conceiving. This dissertation emphasizes on the psychology process behind the decision and how to make decision according to motivation, cognition process and psychology token. It also pays much attention to analyze the basic decision process by the way of research founding of cognition psychology.The train of thought of this dissertation is that making research on management decision behavior by the way of cognition bias and reconsidering and explaining management decision by the aspect of cognition bias under the premise of bounded rationality. It does further research on management decision and cognition bias and the relationship between them from the three aspects of cognition psychology, behavioral economics and behavioral decision. It also conceived a systematic management decision model based on demonstration research. This dissertation puts forward practical and operational correcting bias routes and apply them on the decision making and modifying.The whole dissertation is divided into 8 parts:Chapter 1, introductions. It mainly introduces the background, research value of theory and reality, premise hypothesis of the research, research methods, research innovation and framework.Chapter 2, literature reviews. This part makes a systemization of something about decision-making and cognition from Cognition Psychology, Behavior Economics to Behavior Decision and makes a penetrate analysis by the aspects of several subjects. These three subjects belong to modern theories and subjects and they have advanced theories and viewpoints and help explain the deep reason of what the emergency of cognition bias. The dissertation gets some enlightenment and finds some deficiencies from existed literature. It puts forward the research and investigation directions aiming at that decision-maker can't recognize and understand of cognition bias in management decision.Chapter 3, analyzing the reasons of cognition bias emerging in management decision. This part mainly discusses the emergence reason of cognition bias in management decision from inner factors and outer factors. The inner factors of the emergence of cognition bias is psychology mechanism, and it explains how these factors which are cognition factor, individual factor of decision-maker and bounded rationality of decision-maker affect the emergence of cognition bias mechanism. Cognition factor includes selective perception, rebuilded memory, directed intuition and attribution factor. The outer factor of the emergence of cognition bias is cultural factor which is combined of group and organization culture and social culture. The dissertation combine analysis of inner and outer factors, probe into the deep reason of coming into being of bias and make a better foundation for next research.Chapter 4, analyzing of the effect of cognition bias to management decision. This chapter puts forward the theoretical evidence of dividing the process of cognitive bias based on the theory of information processing and divides the process of decision into 3 parts: information collecting period, information editing period and information evaluating period. It also classifies cognitive bias into 3 types: cognitive bias of information collecting period, cognitive bias of information editing period, cognitive bias of information evaluating period. Cognitive bias of information collecting period are heuristic bias and perception bias. Cognitive bias of information editing period are framing effect, conjunctive and disjunctive events bias, overconfidence, loss aversion and so on. Cognitive bias of information evaluating period are attribution bias, sunk cost, cognitive dissonance, confirmation preference, regret aversion, hindsight and etc. This chapter makes research on the behavioral modality and the frontal effect of cognitive bias to management decision. These cognition bias under uncertainty circumstance will affect people's judgment and decision, therefore, these judgment and decision will affect management decision.Chapter 5, empirical research on the relationship between cognitive bias and management decisions. This part makes empirical research on the relations between cognition bias and management decision by the way of investigation questionnaire. Questionnaire 1 mainly testify if decision-makers have the cognition bias. The result of Questionnaire 2 shows that cognition bias before decision has direct influence on bias in decision and cognition bias in decision has direct influence on bias after decision. Furthermore, identify bias, edit bias and evaluation bias of cognition all have effect on decision bias.Chapter 6, the conceiving and applying of the model of management decision based on cognition bias. After the demonstration researching on the reason of the emergence of cognition bias and the effect of these bias to management decision, this part compares normative decision theory and descriptive decision theory and try to conceive management decision model based on cognition bias.The conceiving of management decision model favors decision-makers who can forecast problems that they will face during the process of decision and bias which will probably appear. It also provides an operated plat for those manager and supports theory and techniques for next correction of bias.Chapter 7, strategy of cognition bias correction of management decision. There are 3 correction strategies of this part. The first strategy is the correction of cognition bias during the process of decision. The second strategy is taking technique strategy to correct bias, and these technique strategy are linear model, statistics techniques and team decision techniques. The third strategy is building bias control frame. Chapter 8, conclusion and prospect. The last part of this dissertation summarizes the whole paper's theories and empirical research and points out the limitation of the paper and the future research expectation.