Asked by Daniel Shephard on Jul 12, 2024
Verified
After graduating from university, you 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 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
Base Rates
Basic pay rates established for roles or tasks before any additional benefits or allowances are added.
- Identify and understand various cognitive biases, including but not limited to, the not-invented-here bias and the anchoring effect.
- Realize the importance of cognitive biases in influencing the evaluation of external information and ideas.
Verified Answer
WJ
Wanting JiangJul 18, 2024
Final Answer :
A
Explanation :
Jay's disregard for the general failure rate of new restaurants in favor of his own belief in success demonstrates a neglect of base rates, which are general statistical outcomes or averages.
Learning Objectives
- Identify and understand various cognitive biases, including but not limited to, the not-invented-here bias and the anchoring effect.
- Realize the importance of cognitive biases in influencing the evaluation of external information and ideas.