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An Advantage of Severance Packages Is That They May Encourage

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An advantage of severance packages is that they may encourage top-level managers to accept takeover bids that are attractive to shareholders.


Definitions:

Conditioned Taste-Aversion

Learning to avoid a food or drink because it has been associated with an illness or negative experience, even after only one exposure.

Stimulus Substitution

A theory in classical conditioning suggesting that the conditioned stimulus acts as a substitute for the unconditioned stimulus, eliciting the same response.

Classical Conditioning

An educational mechanism where the consistent pairing of two stimuli occurs; the response which initially is drawn by the second stimulus, in time, is drawn by the first stimulus alone.

Conditioned Stimulus

A previously neutral stimulus that, after being repeatedly associated with an unconditioned stimulus, evokes a conditioned response.

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