Andrew, a Stock Broker at a Leading Investment Firm, Often

question 14

Multiple Choice

Andrew, a stock broker at a leading investment firm, often recommends his clients to invest in stocks based on a few observations. Andrew relies on his instincts to make such decisions rather than basing his decisions on reliable sources of information and careful number crunching. In this example, Andrew makes which of the following decision biases?

• A) Escalation of commitment
• B) Fundamental attribution error
• C) Misunderstandings about sampling
• D) Availability bias
• E) Judgments about correlation and casualty

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Definitions:

Exclusive Dealing

A business agreement in which a distributor or retailer agrees to sell only the products of one company, excluding competitive products.

Monopolistic Practice

Refers to the actions or strategies by a company that has significant market power to manipulate the market to its advantage, often at the expense of competitors and consumers.

Generic

A term used to describe products or items not sold under a specific brand name, often perceived as lower in cost and sometimes in quality.

Tying Arrangement

A sales tactic where a seller requires the buyer to purchase a secondary product or service together with the primary product.