Asked by
Melissa Monsell
on Nov 25, 2024
Verified
Prospect theory explains the status-quo bias as a combination of loss aversion and the
A) anchoring effect.
B) mental accounting effect.
C) endowment effect.
D) confirmation bias.
Status-Quo Bias
Status-quo bias is the preference to keep things the same or maintain a current or previous decision.
Prospect Theory
A theory in behavioral economics explaining the decision-making process of individuals when faced with alternatives that have uncertain outcomes, with known probabilities of these outcomes.
- Comprehend the core principles of prospect theory, particularly in terms of how individuals assess gains and losses.
- Gain insight into how preset options affect human decision-making and conduct.
Verified Answer
KG
Learning Objectives
- Comprehend the core principles of prospect theory, particularly in terms of how individuals assess gains and losses.
- Gain insight into how preset options affect human decision-making and conduct.