A Common Decision Dilemma That Can Feature Escalation of Commitment

question 146

True/False

A common decision dilemma that can feature escalation of commitment occurs when a decision maker must decide between ending a losing course of action and increasing commitment to it. The decision maker hopes to get future positive results and recover past losses.

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Definitions:

Air Tanks

Reservoirs used in pneumatic systems of vehicles, especially in air brake systems, to store compressed air needed for the operation of brakes and other components.

Diversification

The strategy of spreading investments among different financial instruments, industries, or other categories to reduce risk.

Portfolio Risk

Describes the uncertainty or variability of returns associated with a portfolio of investments, highlighting the combined risk of individual assets.