MGMT 160 Midterm: MGMT 160 Midterm
13 Nov 2017
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Document Summary
This is relational, any individual strategy, you are not alone here. You could not talk to one another and come to some agreement about how to handle it. Why does the bidding escalate? ratchet up escalation. An individual has a sunk cost, focusing on the sunk cost (the loss) can really. People who have done this with executives (people we often aspire to be) escalate into multiple of hundreds and millions of dollars. The phenomenon in the auction that we saw. Resources committed leads to suboptimal return which leads to increased cost of failure. Once you have committed yourself and some kind of resource (i. e. time, financial, etc) (a continuous cycle) and you don"t get the outcome you are expecting, that increases the cost of failure (sunk cost) Once you realize you are losing money, and that amount continues to escalate, there is an instinct and a tendency for people to commit further resources to try to prevent that loss.
