Question

When Sebastian wrote the contract with BP for over two billion dollars, he included targets for performance that had to be met before a payment would be released. Sebastian was trying to avoid ________bias.

Answer 1

Answer:

The question is incomplete, The complete question with options should be;

When Sebastian wrote the contract with BP for over two billion dollars, he included targets for performance that had to be met before a payment would be released. Sebastian was trying to avoid ________bias.

A. overconfidence

B. escalation of commitment

C. sunk-cost

D. framing

E. hindsight

The answer is

B. Escalation of commitment

Explanation:

Escalation of commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment regardless continues the behavior instead of changing the course.

It simply means the irrational behaviour of investing additional resources to a project that is failing.

These resources could be time, energy and money that an individual continue to invest into a falling and sinking venture or business

So, in this situation, before releasing the payment, Sebastian ensures that the targets should be met for the performance. He is avoiding the situation of escalation of commitment bias of him continuing to release or invest money into an already failing contract.