An entrepreneurs business is not doing well and the future does not look promising. However,since the entrepreneur has so much of his life and money invested in the business,he believes that if he invests more time and money,he can turn it around. His actions demonstrate the idea of
A) staged networks.
B) escalation of commitment.
C) creativity.
D) concepts.
E) optimistic bias.

Question

Quizplus · Accepted Answer

The scenario describes an example of escalation of commitment. This is when an individual continues to invest resources into a failing project or business, believing that future returns will justify the additional investment. This behavior is sometimes referred to as the "sunk cost fallacy."

An Entrepreneurs Business Is Not Doing Well and the Future