Common Pitfalls in Personal Decision-Making

Hassan Qudrat-Ullah

Chapter Chapter 3 in Mastering Decision-Making in Business and Personal Life, 2025, pp 51-70 from Springer

Abstract: Abstract This chapter delves into common pitfalls in personal decision-making by examining case studies in financial, relationship, and health contexts. Through John’s financial struggles with an overleveraged mortgage, Sarah’s conflicted relationship with Tom, and Michael’s misguided adherence to a fad diet, the chapter highlights how cognitive biases and emotional factors lead to poor choices. Key concepts such as optimism bias, escalation of commitment, sunk cost fallacy, confirmation bias, and the bandwagon effect are explored to reveal their impact on decision-making. The chapter concludes with strategies to mitigate these biases and enhance decision-making processes, emphasizing the importance of comprehensive evaluation and objective advice for better outcomes.

Keywords: Decision-making; Cognitive biases; Financial mistakes; Relationship choices; Health-related decisions; Optimism bias; Escalation of commitment; Sunk cost fallacy; Confirmation bias; Bandwagon effect; Anchoring bias; Availability heuristic; Societal expectations (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-81068-8_3

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DOI: 10.1007/978-3-031-81068-8_3

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