Escalation of commitment can lead to an overestimation of the value believed to be derived from the acquisition.

Question

Quizplus · Accepted Answer

Escalation of commitment is a cognitive bias where a decision-maker continues to invest resources (time, money, etc.) in a decision, even when evidence suggests that the decision may not be working out as expected. This can lead to an overestimation of the value believed to be derived from the acquisition, as the decision-maker is so invested in the decision that they cannot objectively evaluate its success or failure. Therefore, the statement is true.

Escalation of Commitment Can Lead to an Overestimation of the Value