Psychologically, PSA’s executives and board are vulnerable in three respects. First, they are prone to being risk seeking in the domain of losses. Buying lottery tickets is an example of risk seeking behavior. Second, PSA's executives and board are vulnerable to confirmation bias, the tendency to downplay information that runs counter to a position being evaluated. Third, PSA’s executives and board are prone to overlooking the statistical averages for acquisitions, and instead overfocusing on the specifics of proposed deals.

Source: Forbes March 06, 2017 06:09 UTC