Prior Hypothesis Bias
Prior Hypothesis bias refers to the fact that decision makers who have strong prior beliefs about the relationship between two variables tend to make decisions on the basis of those beliefs, even when presented with the evidence that their beliefs are wrong. Moreover, they tend to use and seek information that is consistent with their prior beliefs, while ignoring information that contradicts these beliefs.
From a strategic perspective, a CEO who has a strong prior belief that a certain strategy makes sense might continue to pursue that strategy, despite evidence that it is inappropriate or failing.
Ref : Strategic Management : An Integrated Approach, 6e, Charles W L Hill, Gareth R Jones
From a strategic perspective, a CEO who has a strong prior belief that a certain strategy makes sense might continue to pursue that strategy, despite evidence that it is inappropriate or failing.
Ref : Strategic Management : An Integrated Approach, 6e, Charles W L Hill, Gareth R Jones
Comments
Absolutely....'Escalating Commitment' is a cognitive bias that is closely related to 'Prior Hypothesis bias'. The other cognitive biases listed are -
1. Reasoning by Analogy
2. Representativeness
3. Illusion of Control
(Ref : Strategic Management : An Integrated Approach, 6e, Charles W L Hill, Gareth R Jones)