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Joe Is Trying to Decide Where to Eat Dinner Tonight

question 38

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Joe is trying to decide where to eat dinner tonight. He considers the local restaurant around the corner from his apartment, and recalls that the last time he ate there, the service was poor and the food was cold when it arrived. He figures the chances of bad service again tonight are high so he decides to go somewhere else. What heuristic is Joe engaging in?


Definitions:

Predicted

Anticipated or expected based on current trends or data analysis.

Internal Growth Rate

The maximum rate at which a firm can expand its operations without obtaining additional financing, driven by reinvestment of its earnings.

Plowback Ratio

A financial metric that measures the proportion of earnings retained by a company after dividends have been paid out to shareholders.

Dividend Payout

The fraction of a firm's earnings allocated to its shareholders through dividends.

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