After graduating from university your are planning to get a job as an accountant.Your best friend Jay is planning on opening his own restaurant.He says he has thought a great deal about this and believes he will be very successful and it is a good decision.You explain to him the fact that most new restaurants fail,but it does not factor into Jay's decision.What does this demonstrate?
A)Base rates
B)Anchoring effect
C)Perceptual defence
D)Sunk costs
E)Hindsight

Question

Quizplus · Accepted Answer

Jay's decision demonstrates a neglect of base rates, which are the statistical probabilities of an event occurring. Despite knowing that most new restaurants fail, Jay does not consider this information in his decision-making process.

After Graduating from University Your Are Planning to Get a Job