A theoretical flaw in the advance market commitment idea

Jorn Sonderholm1

  • 1jorn13@gmail.com

Related Concept Videos

Persuasion Strategies01:52

Persuasion Strategies

Researchers have tested many persuasion strategies, including the foot-in-the door and the door-in-the-face techniques, in a variety of contexts. Ultimately, the principles are effective in selling products and changing people’s attitude, ideas, and behaviors (Cialdini & Goldstein, 2004).
The Anchoring-and-Adjustment Heuristic01:25

The Anchoring-and-Adjustment Heuristic

In order to make good decisions, we use our knowledge and our reasoning. Often, this knowledge and reasoning is sound and solid. However, sometimes, we are swayed by biases or by others manipulating a situation. For example, let’s say you and three friends wanted to rent a house and had a combined target budget of $1,600. The realtor shows you only very run-down houses for $1,600 and then shows you a very nice house for $2,000. Might you ask each person to pay more in rent to get the $2,000...
Confirmation Biases01:31

Confirmation Biases

The confirmation bias is the tendency to focus on information that confirms our existing beliefs and ignore information that is inconsistent with our expectations. For example, if you think that your professor is not very nice, you notice all of the instances of rude behavior exhibited by the professor while ignoring the countless pleasant interactions he is involved in on a daily basis. Have you ever fallen prey to the confirmation bias, either as the source or target of such bias?
Hindsight Biases01:12

Hindsight Biases

Hindsight bias leads you to believe that the event you just experienced was predictable, even though it really wasn’t. In other words, you knew all along that things would turn out the way they did. Can you relate this to the phrase "Hindsight is 20/20" now?
Hypothesis: Accept or Fail to Reject?01:17

Hypothesis: Accept or Fail to Reject?

The outcome of any hypothesis testing leads to rejecting or not rejecting the null hypothesis. This decision is taken based on the analysis of the data, an appropriate test statistic, an appropriate confidence level, the critical values, and P-values. However, when the evidence suggests that the null hypothesis cannot be rejected, is it right to say, 'Accept' the null hypothesis?
There are two ways to indicate that the null hypothesis is not rejected. 'Accept' the null hypothesis and 'fail to...
Framing Effects03:26

Framing Effects

Information is everywhere and its presentation—such as how and when items are presented—can impact our perceptions and decisions surrounding the info. This broad concept umbrellas framing effects—influences that occur due to the way information is framed in its appearance, whether it’s purely the order or the specific wording of a message. Let’s take a look at numerous ways in which two versions of something can objectively say the same thing, yet we respond in different ways based on the...