In the _________ Bias, a Decision Maker Tends to Stick

question 12

Multiple Choice

In the _________ bias, a decision maker tends to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed.

• A) Confirmation
• B) Availability
• C) Escalation of commitment
• D) Overconfidence
• E) Framing

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Definitions:

Discount

A reduction from the usual cost of something or the process of determining the present value of future cash flows.

Political Risk

In international business, the chance that the value of a firm’s investment in a foreign country will be reduced by political actions of either the foreign government or terrorists.

Exchange Rate Risk

The risk that international trade dealings will earn less than expected because of movement in exchange rates.

Economic Risk

The possibility of loss caused by macroeconomic or market conditions, such as changes in interest rates or recessions.