ECONOMICS

Detailed explanation-1: -The sunk costs error occurs when decision makers forget that current choices can’t correct the past. They incorrectly fixate on past expenditures of time, money, or effort rather than on future consequences when they assess choices.

Detailed explanation-2: -Decision making can also be classified into three categories based on the level at which they occur. Strategic decisions set the course of organization. Tactical decisions are decisions about how things will get done. Finally, operational decisions are decisions that employees make each day to run the organization.

Detailed explanation-3: -Common decision-making biases are overconfidence bias, anchoring bias, hindsight bias, confirmation bias, and availability bias. Overconfidence bias is the excessive belief in one’s abilities. Anchoring bias relies heavily on one piece of information, while hindsight bias refers to one’s interpretation of past events.

Detailed explanation-4: -Overconfidence-When decision makers tend to think they know more than they do or hold unrealistically positive views of themselves and their performance. immediate gratification-describes decision makers who tend to want immediate rewards and to avoid immediate costs.