Up Until Three Years Ago,A

question 20

Multiple Choice

Up until three years ago,A.C. Dime opened an average of ten new retail stores a year. One of those stores had to be closed within two years due to poor sales. This 90 percent success ratio was fairly steady for over 30 years. Starting three years ago, the firm has opened 40 new stores and every one had significant profits within 6 months. Management believes their recent success is not just a random event and that all future stores will be profitable. Thus, the managers have decided to open a minimum of 15 new stores each year. The managers are suffering from:

• A)arbitrage limitations.
• B)anchoring and adjustment.
• C)aversion to ambiguity.
• D)the clustering illusion.

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Definitions:

Successive Cohorts

Groups of subjects sequentially assessed over time, often used in longitudinal studies to observe changes within a population.

Quasi-Experimental Design

A research design that resembles an experimental design but lacks random assignment of subjects to treatment and control groups.

Error Variance

Pertains to the variation within experimental data that cannot be attributed to the variables being studied, essentially representing noise in the data.

Quasi-Experimental Designs

Research designs that seek to establish causal relationships between variables but lack the full control or random assignment typical of true experiments.