In an endeavour to help its members remain up to date in various fields, VIA (Vidarbha industries Association) HRD Forum has been organising a series of talks on different topics. One such talk titled The Psychology of Misjudgement? was conducted by Vinayak Gavankar, Director of ISD Training Centre at VIA.
Gavankar said that psychologists and behavioural scientists have been studying the decision making process for a long time. They started with observing the behaviours of birds and animals. They realised that sometimes a particular colour, sound or smell etc., can easily mislead birds and animals. Due to this, their decisions go wrong. For example, ants dragging and throwing out an ant (who’s still alive) out of their community (assuming her to be dead) due to a particular smell, or a mother turkey bird hugging and kissing an enemy bird if a particular sound is being played. All these instances of misjudgements created inquisitiveness in behavioural scientists and they started wondering whether it this psychology is simply restricted to birds and animals only or is it true for human beings also. Soon they got answer to their question when they found news of disappearance of Statue of Liberty.
Gavankar added, In business world if you are a CEO or CFO of an organisation, then you know that your one decision can affect the lives of hundreds or thousands of people. Similarly, one wrong investment decision can lead to wiping out of millions of dollars. And, if you are a leader of the country, your one decision can change the course of history.
He then described some of the cognitive biases and how they affect our decision making with suitable examples. He said the first bias is Incentive Bias – people are driven by the incentives and if the incentive structure is not right, they may be motivated to behave wrongly. He cautioned the audience by saying, If you are a consumer, you should be wary of all those professions where people are highly incentivised to push their products. So, always ask what is their incentive to sell me this product??
The second bias is called Commitment Bias, which means that we tend to stick to our opinions even if later it turns out to be wrong. The third bias is called Authority Bias, which means that we tend accept and follow instructions of an authority even if the instructions are wrong. The fourth bias is called Availability Bias, which means that we tend to take decision based on the recent and available information around us rather than studying the base rate probabilities. The fifth bias is known as Social Bias, which means that we tend to do what others are doing even if that is wrong or inconvenient. The sixth bias is called Framing Bias, which means that we take decision not on the basis of data but the way the data is presented. The seventh bias is called Survivorship Bias, which says that even if we are doing something risky but nothing happens to us in the short run, we tend to ignore the risk in the long run. The eighth is called Super Deprival Syndrome, which says that people react irrationally if something is first given and then taken away from them, even if that something is not needed by them. Therefore businessmen should be very careful while withdrawing any scheme from market, or the facilities given to staff. The ninth is called Anchoring Bias, which says that we tend to stick to wrong anchors in life, which leads to misjudgment. The tenth bias is called Liking Bias, which means that due our liking for a particular thing or person, we tend to ignore the other weaknesses and drawbacks in that particular thing or person. This results into staff complaining of their boss favouring a particular person and ignoring his late coming or early going or buying expensive products with less utility etc. The eleventh bias is called Disliking Bias, which is the opposite of liking bias. In this, we tend to ignore all the good qualities of a person or product because we dislike that person or product. The twelfth bias is known as Reciprocation Bias. This bias says that we tend to reciprocate the favours done to us even if the person receiving benefits is our enemy or competitor. The thirteenth bias is Contrast Bias, which says that our decision-making ability gets influenced by the contrasts in values. The fourteenth bias is called Associative Bias, which means that we subconsciously try to associate the qualities of one person with another and if we have positive feelings about the first person, we develop similar positive feelings for the other. The fifteenth bias is known as Loss Aversion Bias, which means that we feel the pain of loss more than the pleasure of gain hence many times we get tricked when people create fear in our mind of losing something.
In conclusion we should be aware of all our biases, should not jump to quick conclusion, have a cooling period before taking an important decision, develop a checklist of all biases, use them regularly, make list of all our misjudgments and try to find out which biases caused them. Have a member in your team who may have a different point of view. We should never be overconfident about our own judgment.
While Vice President of VIA Aditya Saraf and former Chairman of HRD Forum Hemant Loda gave an opening remark, programme Coordinator Neelam Bowade, conducted the proceedings, introduced the speaker and also proposed the vote of thanks.
Anil Deshmukh granted permission to travel outside Mumbai
Nationalist Congress Party (NCP) leader and former Home Minister of Maharashtra Anil Deshmukh on Monday was granted permission to travel outside Mumbai for four weeks by a special court on Monday. Deshmukh had sought permission to visit his constituency, which is also his hometown, Nagpur.
The application was filed by Deshmukh through his lawyer, Inderpal Singh, stating that he is a native of Nagpur with deep family roots in the city apart from being an elected representative of his constituency.
“The applicant craves a benevolent indulgence of this court to permit him to travel outside Greater Mumbai, including District Nagpur, for a limited duration of about four weeks so as to maintain continuity in his social and family ties and also visit his original and permanent home/constituency,” the plea stated.
The plea further added that “the applicant needs to have due legal consultation with his lawyers in New Delhi for further course of strategy in the present and connected cases.”
Interesting facts you didn’t know about Union Budget | Must Read
Finance Minister Nirmala Sitharaman presented her fifth straight Union Budget when she presented financial statements and tax proposals for fiscal year 2023-24.
Here are some lesser known facts about Union Budget…
The British government presented India’s first ever Union Budget on April 7, 1860.
The first budget of independent India was presented by country’s first Finance Minister RK Shanmukham Chetty on November 26, 1947.
Even though traditionally, the finance ministers present the budget, Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi are the only Prime Ministers to have presented the Union Budget instead of Finance Ministers.
Until 1955, the Union Budget was presented in English. However, the Congress government then decided to print the Budget papers in both Hindi and English.
In 2019, Sitharaman became the second woman to table the budget after Indira Gandhi who presented the budget for the year 1970-71.
Earlier, the government tabled the rail budget separately for 92 years but since 2017, the rail budget was merged with the Union Budget.
Until 1999, the government tabled the Union Budget at 5 pm on the last working day of February as per British era practice but
former Finance Minister Yashwant Sinha changed the timing to 11 am. Years after, late Finance Minister Arun Jaitely changed the budget presentation to February 1.
There’s a customary event called the ‘halwa ceremony’ that is held every year ahead of the Union Budget. It is considered as a gesture of appreciation for all people who have worked on the Union Budget.
To ensure the secrecy of the budget document, a lock-in process is followed – in which all the officials involved
in preparing the Budget come out of Parliament’s North Block only after the Finance Minister has presented the budget.
In 2021, Sitharaman became the first to table paperless Union Budget.
Former Prime Minister Moraraji Desai holds the record of presenting 10 budgets as finance minister, which is the maximum so far.
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