COST ACCOUNTING
INFORMATION FOR DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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more resources are committed to a failing course of action.
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decision makers ignore sunk costs.
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decision makers are responsible for beginning a course of action.
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decision makers are not focused on justifying their actions.
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there is indecision due to information overload.
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Detailed explanation-1: -Escalating commitment (or escalation) refers to the tendency for decision makers to persist with failing courses of action.
Detailed explanation-2: -Escalation of commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment nevertheless continue the behavior instead of altering course.
Detailed explanation-3: -Escalation of commitment arises due to several factors. These include a need to be perceived as competent by others and failure to admit when one is wrong. Another factor that causes escalation bias is a need to remain consistent with the previous action.
Detailed explanation-4: -What is the Commitment Bias? Commitment bias, also known as the escalation of commitment, describes our tendency to remain committed to our past behaviors, particularly those exhibited publicly, even if they do not have desirable outcomes.