When GM continued with a cost cutting strategy that streamlined their operations and focused on SUVs and trucks while losing 82 billion dollars they most likely reflected:
A)the representative heuristic
B)escalating commitment
C)entrapment
D)the gambler's fallacy

Question

Quizplus · Accepted Answer

Escalating commitment refers to the tendency to continue investing in a failing course of action despite increasing losses. GM's decision to continue with a failing cost-cutting strategy that focused on SUVs and trucks despite losing 82 billion dollars reflects escalating commitment. The other options are not applicable to this situation. The representative heuristic is a cognitive shortcut in which people make judgments based on how well something matches their preconceived notion of a category. Entanglement refers to being stuck in a situation due to past investments, even though continuing may not be in the best interest. The gambler's fallacy refers to the belief that the likelihood of an event occurring is affected by past outcomes, even though the probability remains the same for each event.

When GM Continued with a Cost Cutting Strategy That Streamlined