Taxonomies of Debiasing Methods in Procurement Processes

Introduction

The decision-making process does not always take place under clear and definite conditions; in fact, uncertainty prevails in many cases. Therefore, decision-makers often make their decisions without a strategy and they resort to heuristics in order to calculate probabilities accurately and reduce uncertainty. However, Tversky and Kahneman (1974) reported that despite their utility, these heuristics have the potential to engender systematic errors. These systematic errors are called “cognitive biases” in the literature.

Having a shared language to discuss cognitive biases is highly valuable. Decision-makers must be aware of their own cognitive biases as well as those exhibited by others (Kahneman, 2011).

Currently, there are nearly 200 of these cognitive biases, and comprehending and trying to prevent them can be quite challenging if they are not addressed in various taxonomies (Dimara, 2017). This approach is the reason for the enhancement of taxonomic studies.

Researchers who think some of the cognitive biases share similarities, have common aspects, or identify with different names even if they have in same meaning have categorized cognitive biases under some common denominators (Carter et al., 2007). Some of the important researchers who contribute to literature by studying taxonomies are Kahneman et al. (1982), Remus and Kottemann (1986), Kahneman et al. (1992), Arnott (2006), Carter et al. (2007), Haselton et al. (2009), Oreg and Bayazıt (2009), Pohl (2016), Peón et al. (2017), Dimara et al. (2018), and Ceschi et al. (2019). Their studies are mentioned in this chapter.

In procurement processes, sellers focus on comprehending and satisfying buyers’s needs which is more important than focusing on products. However, cognitive biases that affect the decision-makers are one of the obstacles to foresight. Highlighting the existence of these cognitive biases and their impacts on decision-making processes appears significant in ensuring the rational operation of procurement procedures (Tokatcı Şen, K., 2023).

Carter et al. (2007) claimed that 76 identical cognitive biases were referred to differently. They advocated that some of the cognitive biases have the same meaning even though they are referred to as anomaly, behavior, prejudice, shortcut, cognitive bias, decision, or uncertainty.

Cognitive biases under these categories are shortcuts that are efficient in terms of speed and effort, generally providing quick results from the perspective of the supply chain. However, they often lead to incorrect decisions that both parties in the supply chain may encounter (Carter et al., 2007).

Since the identification of cognitive biases, various approaches have been explored to eliminate or mitigate their effects. Among these, the “debiasing method” stands out as a prominent approach including techniques that make a decision-maker impartial and reduce uncertainty (Breiman, 1999). Researchers have identified numerous debiasing methods to address cognitive biases and by the time of progress debiasing methods needed to be classified as cognitive biases.

The debiasing methods that can be employed by procurement managers are expected to result in less susceptibility to biases.