Jim purchases stock in a public company and refuses to sell it even after repeated drops in the original price he paid for the stock.Jim has decided to purchase more of the stock in anticipation of making a profit, and has decided to keep the stock in the face of increasing losses.Jim is suffering from
A) organizational delusion.
B) problem misidentification.
C) escalation of commitment.
D) groupthink.
E) suboptimizing.

Question

Quizplus · Accepted Answer

Jim is exhibiting escalation of commitment, which is the tendency to continue investing in a decision despite evidence that it is failing. Jim is increasing his investment in the stock despite repeated drops in price and continuing to hold onto it as losses increase. This behavior can be irrational and is often driven by a desire to avoid admitting failure or losing face.

Jim Purchases Stock in a Public Company and Refuses to Sell