The Confidence Levels of Executive Leaders May Blind Them to Information

question 94

True/False

The confidence levels of executive leaders may blind them to information that is contrary to a decided course of action; this may help to understand why overconfident CEOs are more likely to conduct mergers and acquisitions.

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Definitions:

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, opposite to normal goods.

Normal Goods

Goods for which demand increases as consumers' income increases, holding all other factors constant.

Cross-Price Elasticity

A measure of how the quantity demanded of one good changes in response to a price change of another good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specific period.