Question

Jake, the CEO of WinWest Inc., launches a new product. Despite the product's persistent failure, he is unwilling to withdraw it from the market because he believes that the product will be profitable in the long term. This scenario is an example of _____. Group of answer choices path dependency participative decision making risk aversion escalation of commitment

Answer 1

Answer:

The correct answer is the last option: Escalation of commitment.

Explanation:

To begin with, the concept known as "Escalation of commitment" in the field of business management and behavioral science refers to the behavioral pattern that an individual has when it faces against a bad decision or situation and after that the person continues to having the same behavior so therefore it stays believing the same even though the increasingly negative outcome keeps on coming. That is why that in this case presented, Jake believes that at the long term the new product will have success even thought that now only bad numbers have been shown to the company.