Recently, a Neighbor You Have Known for Years Won a Lottery

question 11

Multiple Choice

Recently, a neighbor you have known for years won a lottery and received a $250,000 prize. This neighbor decided to invest all of his winnings in a new business venture that he knew only had a 5 percent chance of success. Previous to this, the neighbor had always been ultra conservative with his money and had refused to invest in this business venture as recently as last week. Which one of the following behaviors most applies to your neighbor's decision to invest in this business venture now?

• A) Disposition effect
• B) Affect heuristic
• C) Gambler's fallacy
• D) House money
• E) Get-evenitis

---

Definitions:

Tuning

Tuning involves making adjustments to a system, process, or instrument to improve its performance, accuracy, or efficiency.

Response Patterns

The systematic ways individuals or groups react to stimuli or situations, often studied in psychology and marketing to predict behaviors.

Nadler-Tushman Model

A framework used in the field of organizational dynamics, it outlines how various aspects of an organization interact and how changes in one area can lead to changes in others.

Anticipatory Changes

Changes that are made in preparation for future events, trends, or potential disruptions, aiming to minimize negative impacts and leverage opportunities.