Escalation of Commitment Is Also Known as "Sunken Cost Fallacy

question 161

True/False

Escalation of commitment is also known as "sunken cost fallacy."

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Definitions:

Disaffirm

The legal act of renouncing or rejecting a contract or agreement, especially by a party who was not legally competent to enter it at the time of agreement.

Reasonable Value

The fair or market value of goods or services, as determined by considering the costs, demand, and any other factor relevant to an exchange.

Necessary

In legal and philosophical terms, necessary refers to something required, indispensable, or absolutely needed to achieve a certain outcome or fulfill a condition.

Rescission

The process of formally terminating a contract, returning all involved parties to their pre-contractual state, often due to mistakes, fraud, or misrepresentation.