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and she should have taken the car in for service. However, the driver may have heard
similar sounds before with no consequences, so based on the information available to
her at the time, she may have made a reasonable choice. Therefore, it is important for
decision makers to remember this bias before passing judgments on other people’s

actions.
Anchoring
Anchoring refers to the tendency for individuals to rely too heavily on a single
piece of information. Job seekers often fall into this trap by focusing on a desired
salary while ignoring other aspects of the job offer such as additional benefits, fit
with the job, and working environment. Similarly, but more dramatically, lives were
lost in the Great Bear Wilderness Disaster when the coroner declared all five
passengers of a small plane dead within five minutes of arriving at the accident scene,
which halted the search effort for potential survivors, when, in fact, the next day two
survivors walked out of the forest. How could a mistake like this have been made?
One theory is that decision biases played a large role in this serious error; anchoring
on the fact that the plane had been consumed by flames led the coroner to call off the
[3]
search for any possible survivors.
Framing Bias
Framing bias refers to the tendency of decision makers to be influenced by the
way that a situation or problem is presented. For example, when making a purchase,
customers find it easier to let go of a discount as opposed to accepting a surcharge,
even though they both might cost the person the same amount of money. Similarly,
customers tend to prefer a statement such as “85% lean beef” as opposed to “15%
fat”! It is important to be aware of this tendency because, depending on how a
[4]
problem is presented to us, we might choose an alternative that is disadvantageous
simply because of how it is framed.
Escalation of Commitment
Escalation of commitment occurs when individuals continue on a failing course
of action after information reveals this may be a poor path to follow. It is sometimes
called sunk costs fallacy because the continuation is often based on the idea that one
has already invested in this course of action. For example, imagine a person
purchases a used car that turns out to need another repair every few weeks. An
effective way of dealing with this situation might be to sell the car without incurring
further losses, donate the car, or drive it without repairing it until it falls apart.
However, many people spend hours of their time and hundreds, even thousands of
dollars repairing the car in the hopes that they will justify their initial investment in
buying the car.
A classic example of escalation of commitment from the corporate world may
be Motorola’s Iridium project. In 1980s, the phone coverage around the world was
weak—it could take hours of dealing with a chain of telephone operators in several
different countries to get a call through from, say, Cleveland to Calcutta. Thus, there
was a real need within the business community to improve phone access around the
world. Motorola envisioned solving this problem using 66 low-orbiting satellites,
enabling users to place a direct call to any location around the world. At the time of
idea development, the project was technologically advanced, sophisticated, and made

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