Question

When managers predict that sales for next year will be the same as last year, despite a weakening economy, they are:_____.

a) using framing.
b) using regression to the mean.
c) using confirmation bias.
d) ignoring the base rate.
e) escalating commitment.

Answer 1

When managers predict that sales for next year will be the same as last year, despite a weakening economy, they are exhibiting confirmation bias.

Step-by-step explanation:

When managers predict that sales for next year will be the same as last year, despite a weakening economy, they are exhibiting confirmation bias.

Confirmation bias is a cognitive bias where people seek out and interpret information in a way that confirms their existing beliefs or hypotheses.

In this case, the managers' belief is that sales will remain constant, so they ignore the evidence of a weakening economy and focus on data that supports their belief.

This bias can lead to flawed decision-making and can prevent individuals from objectively considering alternative scenarios or options.