The liquor business is one of the most profitable businesses in India. There is never a cash flow problem for the manufacturer. Vijaya Mallya's business was so profitable, he was able to acquire international brands and lead an extremely lavish lifestyle. Then he decided to start an airline. In keeping with his outlook to life, the airline was the best in terms of luxury. Passengers were pampered, there was inflight entertainment in flights from Mumbai to Delhi. Not a profitable business but still manageable so far. He then decided to grow and to grow he chose to make a hostile acquisition of Deccan Airways - the first low-cost carrier. The objective was to bring the fleet in line with Kingfisher's own fleet. But this was a period of competition and instead of running a premium airline, KFA turned out to be a low-cost airline with premium facilities. Then oil prices started rising and KFA was bleeding money. At this point despite the losses, Mallya could still have cut his losses. KFA was a powerful brand and the Gulf airlines were keen on KFA for the landing slots it owned. (airline international landing rights are like international bank branch licenses very difficult to get). But rather than exit the business Mallya chose to hold on and negotiated with the banks to restructure his loans and lend him more. In the past he had had no issues exiting businesses that did not fit in. These included Kissan which he sold to Nestle, other companies that he got into and sold included Berger Paints, Best & Crompton Engineering and Aventis Pharma. Mallya decided to cling on to the airline and refused to let it go. Meanwhile, the economic environment got worse, the airline was plagued with creditor problems (it is not just banks, airlines get credit from lots of agencies). Even after the banks closed in and demanded that loan be repaid, Mallya took a defiant stand that the airline was a separate entity. Meanwhile, several small planes rotted in the airport as aircraft authorities refused to release the planes until airport dues were cleared and tax authorities made their own claims. Finally, banks declared Mallya a willful defaulter. This resulted funds to all businesses where he was involved with, denied bank credit. Finally, he was forced to completely get out of the liquor business by doing a deal with his erstwhile partner Diageo of UK. The final blow came when RBI Governor Raghuram Rajan said that defaulters have no business living lavish lifestyles and throwing parties. Identify the cognitive bias in play in the above case study.

Explain how could Vijay Mallya have avoided that cognitive bias thereby making an informed decision.