Which bias describes managers who prioritize near-term payoffs when making decisions?

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Multiple Choice

Which bias describes managers who prioritize near-term payoffs when making decisions?

The main idea is a bias toward immediate gratification: managers place greater value on near-term rewards and results than on long-term value. This drives decisions that favor quick wins over strategies whose benefits unfold later, such as cutting or postponing investments, squeezing quarterly targets, or prioritizing short-term performance at the expense of long-term growth. That’s why the immediate gratification bias best fits: it captures the urge to get something rewarding now, even if waiting would yield a bigger payoff later. Sunk cost fallacy involves continuing an action because you’ve already invested resources, not because you’re chasing near-term rewards. Recency bias means giving disproportionate weight to the most recent information, rather than a general preference for immediate payoffs. Overconfidence bias is about overestimating one’s own judgment, not specifically the timing of rewards.

The main idea is a bias toward immediate gratification: managers place greater value on near-term rewards and results than on long-term value. This drives decisions that favor quick wins over strategies whose benefits unfold later, such as cutting or postponing investments, squeezing quarterly targets, or prioritizing short-term performance at the expense of long-term growth. That’s why the immediate gratification bias best fits: it captures the urge to get something rewarding now, even if waiting would yield a bigger payoff later.

Sunk cost fallacy involves continuing an action because you’ve already invested resources, not because you’re chasing near-term rewards. Recency bias means giving disproportionate weight to the most recent information, rather than a general preference for immediate payoffs. Overconfidence bias is about overestimating one’s own judgment, not specifically the timing of rewards.

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