After seeing the price of the stock decline precipitously and the stock exchange declaring the stock as a junk investment, Jason buys significantly more number of shares in that company hoping that dollar cost averaging will help when the price rises. This is an example of which of the following barriers to good ethical judgement?
A) Illusion of control
B) Escalation of commitment
C) Illusion of morality
D) Confirmation trap

Question

Quizplus · Accepted Answer

This scenario is an example of escalation of commitment, where an individual continues to invest in a failing stock despite evidence suggesting that it is a poor investment.

After Seeing the Price of the Stock Decline Precipitously and the Stock