6.01 Warm-up

__________ occurs when people make decisions together in a way that discourages individual responsibility or creativity.

• incrementalism

• groupthink

• framing

•  self-interest

  
  

When unethical decisions come from the top of an organization, and it is

difficult to go against them, is an example of

• sunk costs

• obedience to authority

• overoptimism

• overconfidence

You started your job and believed that lying was completely wrong. After two years, you start to exaggerate financial projections and now believe that lies are only wrong when they cause direct harm. This is an example of

•  obedience to authority

• conformity

• incrementalism

•  self-interest

You are certain that you will be fired if you tell your supervisor you made a major mistake on the profit/loss statement. So you decide to keep this to yourself and believe you can fix this on the next statement. Financial professionals often act unethically due to

• self-interest

• loss-aversion

• sunk-costs

• conformity

Costs that have already been incurred and thus cannot be recovered.

• framing

• incrementalism

• conformity

• sunk costs