Most Privately Held Firms

question 7

Multiple Choice

Most privately held firms

• A)lack a succession plan.
• B)pass the firm to a child.
• C)don't view succession as a major issue.
• D)leave the succession decision to the executor of the owner's will.

---

Definitions:

Neoclassical Assumptions

The foundational premises of neoclassical economics, such as rational behavior, market equilibrium, and utility maximization.

Behavioral Economists

Specialists examining the effects of psychological, cognitive, emotional, cultural, and social components on the economic decision-making of individuals and institutions.

Nudges

Subtle policy shifts or design changes that steer people's behavior in predictable ways without forbidding any options or significantly changing economic incentives.

Prospect Theory

A behavioral economic theory that suggests individuals value gains and losses differently, leading to decisions that can deviate from traditional economic predictions which assume rational behavior.