A Disadvantage of Decentralization Is That It Fails to Motivate

question 52

True/False

A disadvantage of decentralization is that it fails to motivate managers to improve the productivity of their division.

Analyze the impact of gambler’s fallacy and law of small numbers in financial decision-making.

Interpret the role of frame dependence in influencing financial decisions and perceptions.

Comprehend the behavioral characteristics leading to market anomalies such as bubbles and crashes.

Apply behavioral concepts to assess mispricing and valuation in financial markets.

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Definitions:

Group Bonus

A type of incentive pay awarded to a team or group of employees for achieving specific goals or metrics.

Group Incentives

Compensation or rewards offered to a group of employees for achieving or surpassing predetermined goals as a unit.

Competition

The rivalry among businesses to attract customers, which can drive innovation and improve quality and service.

Cooperation

Cooperation is the collaborative effort of individuals or groups to achieve a common goal, characterized by mutual assistance and the sharing of resources or responsibilities.