Chapter 4 Review: Business Law

Sunk Cost Fallacy

-An attempt to recover the time, money, and other resources by spending more time, money or other resources -Expressed as "throwing away good money after bad" -Common for stock market investors

Begging the question

-Arguer begs the question that when she takes for granted/assumes the things she's proving. -Referred to as 'circular reasoning'

False Analogies

-Argues that since something is like something else in one or more ways, it is like it in another respect. -Can identify potential opportunities or problems

Reductio ad Absurdum

-Carries an argument to its logical end w/o considering whether it's an inevitable or probable result. -Called 'the slippery slope fallacy'

Appeals to Pity

-Common fallacy used in the American press -Appeals to pity or compassion, generating support for a victim's predicament. -Usually a Non-Sequitur

Teleological Theory

-Focuses on the consequences of decision ex. laying off 5,000 employees is justified because of its positive effect on prices and profits.

Deontological Theory

-Focuses on the decisions or actions alone ex. laying off competent employees isn't justified regardless of its effect on prices and profits.

Rights theory

-Human rights are fundamental and MUST be respected by other humans -There's a moral compulsion not to harm the fundamental rights of others

Argumentum ad Hominem

-Means 'argument against the man' -This attacks the speaker, not his reasoning. -Basically everything in politics

Argumentum ad Baculum

-Means 'argument to club' -Arguer uses threats or fear to bolster his position. -Common in business and family settings

Argumentum ad Populum

-Means 'argument to the people' -An emotional appeal to popular beliefs, values or wants

Argument from Authority

-Rely on the quality of an expert or person in a position of authority -DON'T rely on the quality of an expert/authority's argument

Profit maximization theory

-Requires a decision maker to maximize a business's long-run profits within the limits of the law. -Based on Laissez Faire

Bandwagon Fallacy

-States that we should/shouldn't do something merely because 1+ people do/don't do it. -Similar to Argumentum ad Populum

The Lure of the New

-The idea that we should buy or do something just b/c it's new (just released/improved) -Opposite of the Appeals to Tradition Fallacy

Appeals to tradition

Infers that b/c something has been done a certain way in the past, it should be done the same way in the future

Non Sequiturs

-A conclusion that doesn't follow from the facts or premises one sets out. -Speaker is missing the point/coming to an irrelevant conclusion

Kantianism

Humans are able to judge the morality of any action by applying a categorical imperative -Judge an action by applying it universally -We may not use others to achieve our own happiness

Justice theory

It's right for government to redistribute wealth in order to help the poor and disadvantaged -Greatest Equal Liberty Principle: Each person has an equal right to basic rights and liberties -Difference principle: Social inequities are acceptable only if they cannot be eliminated without making the worst-off class even worse off

Utilitarianism

Requires a decision to maximize utility for society as a whole

False Cause

Results from observing two events and concluding that there is a causal link between them when there is no such link.

The Gambler's Fallacy

Results from the mistaken belief that independent prior outcomes affect future outcomes

Stakeholder theory of corporate social responsibility

The stakeholder theory