Roger purchases stock in a public company and he 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. Roger is suffering from
A)organizational delusion.
B)problem misidentification.
C)escalation of commitment.
D)groupthink.
E)self-reactions.

Question

Quizplus · Accepted Answer

Roger is exhibiting escalation of commitment, which refers to a tendency to continue investing in a failing decision or project despite mounting losses or negative feedback. This can be due to sunk costs or psychological factors such as the desire to avoid admitting failure or the belief that success is just around the corner. Jim's decision to purchase more stock could also be seen as escalation of commitment.

Roger Purchases Stock in a Public Company and He Refuses