The Relationship Between Commitment and Strategic Options May Be Best

question 57

Multiple Choice

The relationship between commitment and strategic options may be best described as:

• A)Commitments increase the value of real options
• B)By committing to a set of options,a firm can reconcile two sources of value: value from deterring competitors and value from real options
• C)Making commitments inevitably involve giving up options
• D)The two reside in different realms of analysis: commitments can be analyzed using game theory;real options can be analyzed using financial theory

---

Definitions:

Formal Operational Reasoning

Piaget’s fourth stage of cognitive development, characterized by abstract, logical, and systematic thinking.

Risky Impulses

Sudden urges to engage in behaviors that could be dangerous or have negative consequences.

Concrete Problems

Issues or challenges that are tangible and can be directly observed or physically dealt with, as opposed to abstract problems.

Hypothetical-Deductive Reasoning

The process of forming hypotheses and systematically testing them to solve problems or arrive at conclusions.