In the 1980s and 1990s,Neon Corp.was the most successful firm in the television market.The firm believed that its competitors would never be able to produce televisions comparable to its quality and cost.As a result,it was unable to respond to the new generations of television with which its Japanese competitors had begun to infiltrate the market.Eventually,Neon lost its market leadership to its competitors.This scenario most clearly exemplifies the _____.
A) Giffen effect
B) Hawthorne effect
C) Idiosyncrasy Credit
D) Icarus Paradox

Question

Quizplus · Accepted Answer

The scenario described in the question is characteristic of the Icarus Paradox, which refers to a situation where a successful company becomes so overconfident in its abilities that it fails to adapt to changing market conditions, ultimately leading to its downfall. Neon Corp's belief that its competitors would never be able to match its quality and cost, and its subsequent inability to respond to new generations of television, is a clear example of this phenomenon.