SCENARIO 12-1 You Are Making a Decision Whether to Discontinue

question 74

Multiple Choice

SCENARIO 12-1 You are making a decision whether to discontinue research on a new drug.This new drug would save lives,but it is uncertain whether it can be developed within a reasonable time frame and at a reasonable cost.Your firm has already spent a small fortune on this drug.You have gathered so much information in preparation for making the decision that you are unable to sort the good information from the superfluous.
-Refer to Scenario 12-1.You feel that you are personally responsible for the lack of success with this drug.One course of action that you may be expected to take is

• A)availability heuristic.
• B)representative heuristic.
• C)escalation of commitment.
• D)satisficing.
• E)ignoring the base rate.

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Definitions:

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Control

In experiments, the standard to which comparisons are made by keeping all variables constant except the one being tested.

Biased

Showing an unfair preference or prejudice for or against something or someone.

Suspend Belief

Temporarily accepting something as true or possible, even if it seems unlikely, often used in the context of fiction.