Session 4-5 - Perceptual Distortions

Process and Factors
PERCEPTION Common Distortions

Attribution Theory
JENSEN SHOES
 Kravitz’s assumptions about Brooks’ abilities,

attitudes, and motivations
 Lack of ability or intention to complete the work
 Resistance to the contract was indication that he was
refusing to work at all
 Trying to take advantage of company’s employee
friendly culture
 De-motivated
JENSEN SHOES
 Brooks’ assumptions about Kravitz’s abilities,
attitudes, and motivations
 Lack of ability or intention to be a leader
 Request for detailed project report
 Trust issue
 Her preferred work style
 Failure to complete project proposal
 Lack of ability and intention
 Being realistic and reasonable
CASE: JENSEN SHOES
 “Raising concerns would mean complaining”

and ‘outsider’ stance because of growing
mistrust
 Self-fulfilling
 Ethnic market assignment
 Relegated to a stereotype; not being groomed for
broader responsibilities
CASE: JENSEN SHOES
 Resistance to contract
 Indication of refusing to work at all
 Question on integrity
 Trip to San Diego
 Trying to get out of work or taking advantage of
company’s employee friendly culture
 Networking
CASE: JENSEN SHOES
 Motivation
 Threatening job security
 Job security was not the goal
 People management – color and women
 Stereotypes
 Chuck??
UNDERSTANDING
OTHERS
 When Peter tells you about Paul, you learn
more about Peter than you do about Paul
UNDERSTANDING
OTHERS
 Frame of Reference / Point of view
 External view
 Phenomenological view
 Self-Concept
UNDERSTANDING
OTHERS…
 Inferring self-concept
 Situational cues
 Repeated interactions
 Observations for cues
 Never the complete knowledge
 More exposure – better inferences

PERCEPTION
People’s behavior is based on their perception of

what reality is, not on the reality itself.
PERCEPTION
 A process through which people receive and

interpret information from the environment
 Forming impressions about ourselves, other
people and daily life experiences; attaching
meaning to the environment
 A very complex cognitive process that yields a
unique picture of the world that may be quite
different from reality
FACTORS INFLUENCING
PERCEPTION
 The Perceiver
 The Setting
 The Perceived
ATTRIBUTION THEORY
 One of the ways in which perception exerts its

influence on behavior
 Process of developing explanations or assigning
perceived causes for events
 Internal or external determination of causality
 Three factors: distinctiveness, consensus,
consistency
ATTRIBUTION THEORY
ATTRIBUTION ERRORS
 Fundamental attribution error

 situational factors < personal factors
 “What people do reflects who they are”
 Self-serving bias
 Personal responsibility for performance in success v/s
failure
COMMON PERCEPTUAL
DISTORTIONS
 Stereotypes
 Assigns attributes commonly associated with a group to
an individual
 Halo Effects
 Using one attribute to develop an overall impression of
a person or situation
 Selective Perception
 Tendency to filter problems based one’s own point of
view and ignore others
COMMON PERCEPTUAL
DISTORTIONS (CONTD.)
 Projection
 Assigns personal attributes to other individuals
 Contrast Effects
 Meaning of something is arrived at by contrasting it
with a recently occurring event or situation
 Self-fulfilling Prophecy or Pygmalion Effect
 Tendency to create or find in another situation or
individual that which you expected to find in the first
place
INDIVIDUAL DECISION
MAKING Identify problem
Establish decision
Evaluate criteria
Weigh decision
Implement choice
criteria
Generate
Make a choice alternatives
Evaluate
alternatives
INDIVIDUAL DECISION
MAKING
 Rational decision making?
 Bounded rationality
COMMON BIASES IN
DECISION MAKING
 Over confidence bias
 Subjective confidence about own judgement is greater
than the objective accuracy of those judgements,
especially when confidence relative high
 Confirm-Evidence/Confirmation bias
 Tendency to focus on information that will confirm
preexisting beliefs and conclusions
 Sunk cost trap
 Tendency to escalate commitment to a course of action
in which substantial prior investments have been made
COMMON BIASES IN
DECISION MAKING
 Anchoring bias
 Tendency to rely too heavily on the first piece of
information.
 Availability bias
 Tendency to base judgements on information readily
available
 Framing bias
 Tendency to react in a particular choice based on how
it is presented
COMMON BIASES IN
DECISION MAKING
 Hindsight bias
 Tendency to believe falsely, after an outcome of an
event is actually known, that one would have
accurately predicted that outcome
DO YOU THINK
YOU CANNOT BE
MISLED??
MÜLLER-LYER ILLUSION
A & B SHADES ARE SAME
OR DIFFERENT
A & B SHADES ARE
SAME!!!
WHAT DO YOU SEE?
WHAT IS IT?
WHAT IS IT?
VIDEO TIME!
GAS GUZZLER
Consider two car owners who seek to reduce their

costs: Anand switches from a fuel-guzzler of 12
kmpl to a slightly less voracious guzzler that runs
at 14 kmpl. The environmentally virtuous Bindu
switches from a 30 kmpl car to one that runs at
40 kmpl.
Suppose both drivers travel equal distances over
a year. Who will save more fuel by switching to
their new car?
THINKING
1. A bat and a ball together cost $1.10

2. The bat costs a dollar more than the ball
3. How much does the ball cost?
MARINE PROPERTY
You are a marine property adjuster charged with
minimizing the loss of cargo on three insured barges that
sank yesterday off the coast of Alaska. Each barge holds
₹200,000 worth of cargo, which will be lost if not
salvaged within 72 hours. The owner of a local marine-
salvage company gives you two options, both of which
will cost the same:
Plan A: This plan will save the cargo of one of the three
barges, worth ₹200,000.
Plan B: This plan has a one-third probability of saving the
cargo on all three barges, worth ₹600,000, but has a two-
thirds probability of saving nothing.
Which plan would you choose?
MARINE PROPERTY…
Plan C: This plan will result in the loss of two of the three
cargoes, worth ₹400,000
Plan D: This plan has a two-thirds probability of resulting
in the loss of all three cargoes and the entire ₹600,000
but has a one-third probability of losing no cargo.
Which plan would you choose?

IMPORTANT POINTS
Rational being??
System 1 and System 2
 Fast / intuitive / automatic – S1
 Slow / analytical / reasoned – S2
Perception, attention
Change blindness
Thank you

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Process and Factors

PERCEPTION Common Distortions

 Kravitz’s assumptions about Brooks’ abilities,

 “Raising concerns would mean complaining”

 Never the complete knowledge

 More exposure – better inferences

People’s behavior is based on their perception of

 A process through which people receive and

 One of the ways in which perception exerts its

 Fundamental attribution error

Consider two car owners who seek to reduce their

1. A bat and a ball together cost $1.10

Which plan would you choose?

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