The Risk of Employee Opportunism on Behalf of Agents in a Public

question 33

Multiple Choice

The risk of employee opportunism on behalf of agents in a public stock company is exacerbated by

• A) stakeholder strategy.
• B) information asymmetry.
• C) corporate governance.
• D) groupthink.

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Definitions:

Coin Flip

A method of making a binary decision or selecting randomly between two options using the outcome of a tossed coin.

Base Rate Fallacy

A cognitive error where individuals ignore general statistical information (base rates) in favor of specific anecdotal information.

Representativeness Heuristic

A mental shortcut used to make decisions or judgments by comparing information to our mental prototypes and stereotypes.

Anchoring and Adjustment Heuristic

A cognitive bias where an individual relies too heavily on an initial piece of information (anchor) when making decisions, with insufficient adjustments made thereafter.