Brittain, J and S. Sitkin (1998). Carter Racing Parts a & B. Dispute Resolution Research Center, Northwestern University.

The carter racing case demonstrates the process that goes into decision-making with limited information. In the case, Carter brothers, owner of Carter Racing, must decide whether to participate in an important race which will materially affect the future of their business. He faces the challenge that inclement weather on race day could produce an engine blowout. Some factual information is given to assess the choices, but the facts are clouded by personal preferences, and feelings on what the data mean. The future of the race team depends heavily on this decision.

I think John Carter must participate in the Pocono race. Why? To answer this question let me first analyse the given information. On technical front, if we look at the (limited) data carefully, it can be inferred that the temperature on the racing day will be less than 100C and there is no gasket failure at temperature below 100C, as it is evident from the exhibit1: note from Tom Burns. Nevertheless, there were engine blowouts due to gasket failure but the reason for the same is clear from their outstanding performance during this season. They have been running fast quite often and hence gasket suffers fatigue. So, the gasket fails due to fatigue and not due to temperature. However, the fact that both factors combined together (meaning fatigue at low temperature) is responsible for gasket failure; cannot be declined. But the probability of gasket failure due to temperature alone seems to be low.

On financial front, if they do not participate in the race, they will end up the season with $50k in the hole and they will lose the lucrative sponsorship offer from Goodstone. So, there is quite a good amount of money on stake, which again strengthens the argument that they should positively consider participating in the race. Now, let us examine the scenario when they participate in the race and do not get visibility. I think the chance of this event is very sleek. As discussed in the previous paragraph;...