Solved

Scenario II Scenario II Is Based on and Presents Results Consistent with Consistent

question 1

Multiple Choice

Scenario II
Scenario II is based on and presents results consistent with the following study:
Bechara, A., Damasio, H., Tranel, D., & Damasio, A. R. (1997) . Deciding advantageously before knowing the advantageous strategy. Science, 275(5304) , 1293-1295. doi:10.1126/science.275.5304.1293
Bechara et al. (1997) studied risky decision making on a gambling task in patients with brain damage in an area critically involved in executive functions such as planning and decision making. They compared this performance with the performance of control participants without brain damage. All participants were given a starting bankroll of $2,000 in facsimile dollars. In the baseline condition, participants chose cards from among four decks. Selecting cards from Decks A and B sometimes resulted in a win of $100. Selecting cards from Decks C and D sometimes resulted in a win of $50. No losses were incurred in this condition. In the subsequent experimental condition, however, some cards in all decks produced losses. The losses in Decks A and B were large and occurred frequently enough to possibly result in bankruptcy. The losses in Decks C and D were considerably smaller. Bechara et al. measured deck selection and the galvanic skin response (GSR) both prior to (anticipatory) and after (post-outcome) turning over each card.
In the baseline condition, all participants in both groups showed a clear preference for Decks A and B. Both groups showed small but reliable anticipatory and post-outcome GSRs. In the experimental condition, with continued play the controls exhibited a clear preference for Decks C and D, while the patients continued to play more from Decks A and B. Relative to the baseline condition, controls exhibited a much larger anticipatory GSR prior to each decision whereas the patients' anticipatory GSR was small and similar to that obtained under the baseline condition. The post-outcome GSRs were similar in the two groups and occurred to both wins and losses.
Interestingly, the investigator systematically interrupted play during the experimental condition and asked all participants if they had developed a game strategy. With continued play, most of the control participants labeled Decks A and B as "the bad decks." Among the patients with brain damage, only half eventually labeled Decks A and B as "the bad decks." Remarkably, in both groups this realization did not affect game play. The minority of the control group who did not express a negative opinion about Decks A and B nevertheless tended to avoid those decks. Similarly, the patients who acknowledged that Decks C and D were risky nevertheless preferred those decks.
-(Scenario II) The results of this experiment suggest that the ability to correctly identify optimal game strategy is:

Definitions:

Controller

The manager of the accounting function of a vertical (business unit).

Managerial Accounting

The practice of analyzing, interpreting, and communicating financial information to managers for the purpose of business decision-making.

Dollar Savings

The amount of money saved as a result of cost reduction, efficiency improvements, or other financial strategies, expressed in dollar terms.

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) are a set of rules and standards used for financial reporting that are adopted by most U.S. companies for preparing their financial statements.