MGT X409.51: Managerial Decision Making 

Guidelines

1. Use the Word template provided. Please bold any class concepts you use in the write-up.
2. Strict 2000 word limit (minus 50 for headings). ½ pt off per 50 words over (rounded up).
3. As usual, no need for introduction, background, or conclusion. You can waste a max of 100 combined words on these superfluous parts, with ½ point off per 50 words over (rounded up)!

Questions

Part I: Descriptive (20 points possible)

Evaluate the decision making described in this case. Focus on the following four questions (but some sections will be longer than others).

1. Analyze King’s customer experience using course concepts. What makes their free-to-play games so successful? NOTE: Talk about the psychology from the players’ perspective.
2. Analyze the strengths in King’s decision making process, and what decision errors or biases these strengths reduced or eliminated. NOTE: Parts B & C are about organizational decisions, not about customer psychology.
3. Analyze the weaknesses in King’s decision making process (errors, biases, etc.). Be specific about identifying the psychological drivers underlying these shortcomings.
4. What are the psychological factors influencing Zacconi’s decision to accept Activision’s acquisition offer? NOTE: The actual decision is irrelevant. I’m only interested in what influenced his decision. (HINT: This is mostly found on p.1 & 9).

Part II: Prescriptive (10 points possible)

Based on your Part I analyses, how can King Digital improve their decision making?

1. Suggest one or two prescriptions that would help a company like King make better decisions in such situations (these should flow from Part I—this is not the place to introduce new weaknesses). Be as specific as possible about what you would do and what biases or errors you are trying to combat. Be concrete about how these prescription(s) would be implemented. Consider the costs (money, time, and psychological) associated with your suggested changes and be realistic. Please be creative here, but justify your prescriptions using concepts only from this class.
2. Be aware that executives may not be particularly receptive to these prescriptions. What are the psychological sources of resistance? How might being acquired by Activision help overcome the resistance or make it worse?

Hints (read carefully)

1. Please restrict yourself to the information provided in the case. There are many articles about the company and information regarding this case and subsequent events online, but they are not relevant for the final. Evidence from outside the case will NOT count.
2. This is NOT a research paper. Searching the Internet will NOT help you on the exam but CAN hurt you by distracting you with irrelevant information. I’m interested in YOUR application of our course concepts to a specific case, not your research abilities.
3. Use only the concepts from this class to analyze the case! Do not base your response on your knowledge from other business classes, especially marketing, or OB, or strategy.
4. Assume we understand the class concepts (don’t waste words explaining them), but indicate why the concepts are relevant. Apply concepts well to show your understanding.
5. Do not just laundry list every bias you think might be relevant. Thoughtful analysis and justification are required. I would rather you concentrate on making a few points well than list a number of points superfically and not elaborating on any of them in depth.
6. Provide evidence from the case to support the psychology. Do not just regurgitate examples from lectures or readings or rely on examples from other companies.
7. I discourage direct quotes from the case or readings. A couple quotes at most, but you can usually make the point more succinctly in your own words. You should definitely not directly quote or even paraphrase from readings other than the case.
8. Use the principles we discussed in the week on organizational decision making to maximize the efficacy of working with a partner. Do not just split up writing for Parts I and II. Your prescriptions (Part II) should flow from your descriptive analysis (Part I)!
9. Remember that hindsight is 20/20. It is natural to conclude that bad outcomes result from bad decisions, but we discussed in class how good decisions can still have bad outcomes due to inherent risks and uncertainty (and vice versa). It is important for you to show that you are able to delineate good decisions from bad ones. The case may not always have all the detailed information you would need to identify a decision error definitively. However, do your best to convince us that your analysis does not have outcome bias.

Topics/Class Concepts:
Week 1 – Introduction and Preferences
Week 2 – Risk, Uncertainty, and Heuristics
Week 3 – Overconfidence
Week 4a – Mental Accounting
Week 4b – Choice Context
Week 5 – Choice Over Time
Week 6 – Memory, Emotion, and Social Heuristics
Week 7 – Decisions by Algorithm
Week 7 – Behavioral Finance
Week 8 – Organizational Decision Making
Week 9 – Happiness
Week 9 – Nudging (Choice Architecture)
Week 10 – Course Wrap