SCENARIO 12-1 You are making a decision whether to discontinue research on a new drug.This new drug would save lives, but it is uncertain whether it can be developed within a reasonable time frame and at a reasonable cost.Your firm has already spent a small fortune on this drug.You have gathered so much information in preparation for making the decision that you are unable to sort the good information from the superfluous.
You feel that you are personally responsible for the lack of success with this drug.One course of action that you may be expected to take is
A)availability heuristic.
B)representative heuristic.
C)escalation of commitment.
D)satisficing.
E)ignoring the base rate.

Question

Quizplus · Accepted Answer

The scenario describes the phenomenon of escalation of commitment, which occurs when individuals or organizations persist in a failing course of action despite negative feedback or evidence of its ineffectiveness. In this case, the decision to discontinue research on the drug may be emotionally difficult due to the sunk costs and potential personal responsibility for the outcome. However, continuing to invest further resources may not be rational or efficient, especially if it appears unlikely that the drug will be successful.

SCENARIO 12-1 You Are Making a Decision Whether to Discontinue