During the realization of business activities, managers have to make many decisions. Some of these are the routine decisions they make every day, while others are more complex and have great effects. Although managers think that they make decisions that are complex and have great effects rationally, the reality is the opposite. Complex decisions take based on emotion, both due to the large number of variables in such decisions and the lack of information about the possible consequences. At the same time, the analytical decision-making process requires full knowledge and analytical ability, and most of the managers do not have time to analyze and so use various shortcuts when making decisions. However, the use of these shortcuts can cause biases. The use of shortcuts can be beneficial when awareness of managers about these biases is raised. In this study, regret aversion, endowment, confirmation, self-control and recency biases among the biases in the literature were examined theoretically and empirically, and it was aimed to discuss their effects on managerial decisions. It was observed that raising awareness of these biases has various benefits for managers. In addition, managers are normal people with emotions and intelligence like everyone else and cannot always be expected to make rational decisions. It was also revealed that, thanks to the awareness of biases, managers will develop more competent decision-making skills in which they use both their mental and emotional skills together.
Selim Aren, Hatice Nayman Hamamcı. Biases in managerial decision making: Regret aversion, endowment, confirmation, self-control, recency. International Journal of Multidisciplinary Research and Development, Volume 8, Issue 7, 2021, Pages 62-69