Don't Let the Past Sink Your Future

Timothy Meyer

No 413314, Cornhusker Economics from University of Nebraska-Lincoln, Department of Agricultural Economics

Abstract:

Decision scientists have many algorithms for making decisions. These algorithms can be qualitative and subjective, such as following a 7-step process, to highly quantitative procedures like minimax regret, or linear programming. These techniques are very different from each other, but in one way they are very similar; they never, ever suggest the manager become emotional and use past decisions to guide the future.

Past decisions and events should guide decision-making. They help managers assign probabilities as well assessing performance. Viewing these events and situations as permanent paths is where sunk costs become problematic.

Includes discussions of four scenarios.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nbaece:413314

DOI: 10.22004/ag.econ.413314

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