Insurance companies in the state of Florida earned record profits in 2006, suggesting in light of the calm hurricane seasons (in Florida) in 2005-2007 that Nationwide's decision to cancel policies may have cost the company potential revenue and customer goodwill. Do you think Rommel's quote about making a "sound business decision" reveals any perceptual or decision-making biases? Why or why not?
Review the section on common biases and errors in decision making. For companies such as Nationwide, American Airlines, and JetBlue that must respond to natural events, which biases and errors are relevant and why?
In each of the three cases discussed here, which organizational constraints were factors in the decisions made?
How do you think people like Rommel, Burgin, and Neeleman factor ethics into their decisions? Do you think the welfare of policy owners and passengers enter into their decisions?