A Recent Article in the McKinsey Quarterly,present a Useful List

question 52

Essay

A recent article in The McKinsey Quarterly,present a useful list of some of the ways that strategic decisions can go wrong because of human shortcomings: 1.Overconfidence 2.Loss aversion 3.Champion Bias 4.Misaligned risk aversion 5.Misaligned time horizon
Required: Provide a one sentence explanation for each of the five human shortcomings in decision making.

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Definitions:

Opportunity Cost

Represents the value of the next best alternative forgone when a decision is made to choose one option over others.

Factors Of Production

Factors of production are the inputs needed for the creation of a good or service, including land, labor, capital, and entrepreneurship.

Unemployment Of Resources

Unemployment Of Resources refers to a situation where factors of production, such as labor and capital, are not being used in the production process.

Production Possibilities Curve

A graphical representation of the maximum quantities of two goods or services that an economy can produce when utilizing its resources fully and efficiently.