Question

ognitive biases

Gary’s Gumbo is a locally owned restaurant in Houston, Texas, with eight locations. The owner recently developed a new recipe for the restaurant’s signature gumbo dish. The owner decided to try out the dish in four of the company’s locations. After one month, the owner had gathered the following data:

	Locations	with New	Gumbo	Recipe		Locations	with Old	Gumbo	Recipe
Location #	1	2	3	4		5	6	7	8
Number of orders	1,253	1,386	1,495	1,377		1,112	1,025	1,224	997
Number of customer complaints (about the dish)	34	36	44	32		12	9	6	8

After looking over the data, the owner happily noted that the number of orders of the signature gumbo dish at the locations where the new recipe had been used (locations 1–4) had increased in comparison to the traditional number of orders of the dish (locations 5–8). The owner then decided to implement the new recipe at the rest of the company’s locations.

a. Identify whether the decision of introducing the new gumbo recipe in all locations is correct.

a. The number of orders increased in the locations after introducing the new gumbo recipe. So the decision of the company is correct.

b. The number of orders increased along with complaints so the decision of the company should be reconsidered.

c. The number of orders increased but the decision of introducing the new recipe to all locations should be reconsidered.

d. None of the above

b. Identify the cognitive bias in this situation.

a. The owner of the company correctly identified the results based on the feedback.

b. The owner of the company accepted only the positive feedback.

c. The owner of the company accepted the negative feedbacks

d. The owner of the company accepted the positive feedback and ignored the negative feedback.

Answer 1

1. (b) The number of orders increased along with complaints so the decision of the company should be reconsidered.

Explanation:

As we can oobserve from the data provided, the number of complaints has increased considerably along with the number of orders. This is a serious concern as signature dishes are relevant for the reputation and future business of the restaurant. The considerable increase in number of complaints with a nominal increase in number of orders may not be beneficial for the restaurant and the decision must be reconsidered.

2. (d) The owner of the company accepted the positive feedback and ignored the negative feedback.

Explanation:

The owner has only considered the increase in number of orders as the basis for his decision. He has completely ignored the substantial increase in number of complaints along with the increased number of orders. Therefore the owner has accepted the positive feedback but has completely ignored the negative feedback.