The MBA Logic Trap Survival Guide
I started penning this list in class last night. I think it sums up most of the key MBA stuff (both academic and practical wisdom) I’ve learned over the past two years:
- Risk is quantifiable, uncertainty is conceptual.
- Decisions are always made on the margin, not the average.
- Data are facts and figures; information is useful data in context.
- Sunk costs should not enter into a future analysis.
- There is no predictive relationship between happiness and productivity. [This is mentioned 2-3 times per chapter in every Organizational Behavior text.]
- A person who considers the Capital Asset Pricing Model (CAPM, Cap-Em) essential is someone whose financial model is useless.
- If something seems priced magically in finance, the answer to your question is “arbitrage.”