Business Homework Solutions
Problem
#24592

Heuristics or bias in the reaction of your supervisor

Your employer, It's Electric, an electrical fixtures supply company has decided to purchase company cars for all of the sales staff. You have been asked to select the line of automobiles that should be purchased. You have decided that on grounds of economy and longevity you want to purchase one of those solid, stalwart, middle-class Swedish cars--either a Volvo or a Saab. As a prudent and sensible buyer, you go to Consumer Reports, which informs you that the consensus of their experts is that the Volvo is mechanically superior, and the consensus of the readership is that the Volvo has the better repair record.
Prior to meeting with the Volvo sales people you talk the decision over with your supervisor. He reacts with disbelief and alarm: 'A Volvo! You've got to be kidding. My brother-in-law had a Volvo. First, that fancy fuel injection computer thing went out. Had to replace it.
Then the transmission and the clutch. Finally sold it in three years for junk.'"(Adapted from: Nisbett, R.E., et al., "Popular Induction: Information is Not Always Informative", in J.S. Carroll & J.W. Payne (Editors), Cognition and Social Behavior, Halsted, 1976)

Part 1:
Identify and explain the type of heuristics or bias in the reaction of your supervisor.

Part2:
After doing some additional research you still believe that Volvo is the best car for your company. Compose an email to your supervisor to try and convince him of the advantages to the Volvo. Use any research you can locate on the internet to support your decision.


Solution Summary

The solution explains the problem of Heuristics and Biases in judgment based on paper "Judgment Under Uncertainty: Heuristics and Biases", Amos Tversky and Daniel Kahneman, Science Vol. 185, 1974, Pp 1124-1131. It discuss the availability Heuristic and major biases coming in social behavior due to availability heuristics.

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