Two thirds of mergers fail, but many CEOs will still try for a merger and risk millions of dollars because they believe that this one will be the exception. What mistake do these CEOs make?
A) Sunk-cost trap
B) Negativity bias
C) Overconfidence
D) Escalating commitment

Question

Quizplus · Accepted Answer

These CEOs are making a mistake of overconfidence - they are too confident in their abilities to make the merger work, despite the statistics showing that most mergers fail. This can lead to a lack of objective analysis and a failure to adequately plan for potential pitfalls or challenges.

Two Thirds of Mergers Fail, but Many CEOs Will Still