1. Perception - the process through which people select, organize, and interpret information

2. Social Perception - the process of combining, integrating, interpreting information about others

-Perceiver

-Target

-Situation

3. Attribution - the process through which individuals attempt to determine the causes behind behavior

-External versus internal

4.BIAS 

-Perceptual Biases - Predispositions to misperceive others that interfere with making completely accurate judgments

-Fundamental attribution error - Tendency to attribute other’s actions to internal causes while largely ignoring external factors – opposite holds for oneself

If I fail, it’s because of the situation (external factors); if someone else fails, it’s because he/she didn’t try hard enough, isn’t smart enough etc. (internal factors)

-Egocentric bias: We overestimate own contribution

DECISION MAKING

1. RATIONAL DECISION MAKING

Evaluate ALL Alternatives

2. BOUNDED RATIONALITY:  Select  the First “Good Enough” Choice

They don’t optimize.  They satisfice.

They seek to satisfy certain criteria

They take the first option that suffices

3. THREE MAJOR BIASES

a. The Availability Bias: 

The tendency to base judgments and decisions on information that is readily available.

b. Prospect Theory:

-Framing - Tendency for people to make different �decisions based on how the problem is presented 

-Prospect Theory - People are risk-seeking regarding losses, but risk-averse regarding gains.

c. Escalation of Commitment:

An increased commitment to previous decision in spite of negative information.