People Are LESS Likely to Engage in the Commons Dilemma

question 5

Multiple Choice

People are LESS likely to engage in the commons dilemma when ____.

• A)they communicate with others
• B)others are behaving badly
• C)they are anonymous
• D)they are highly self-interested

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Definitions:

Abandonment Option

A form of real option in capital budgeting, giving a company the ability to abandon or terminate a project during its life if it becomes unprofitable.

Discount Rate

A rate of interest utilized within discounted cash flow evaluations to ascertain the present worth of forthcoming cash flows.

Decision Tree

A timeline representation used in planning projects subject to multiple outcomes. Wherever an event has several outcomes, the timeline branches into as many paths, each with a probability. The result is a proliferation of possible paths to completion, each representing an outcome, its financial implication, and its probability. Hence, the decision tree specifies a probability distribution for the project’s overall financial outcome.

NPV Profile

A graphical representation showing the relationship between the Net Present Value (NPV) of a project and various discount rates.