Asked by
Marietha Davis
on Oct 25, 2024Verified
A person who is oversensitive to loss and is unwilling to recognize the loss and move on has:
A) loss aversion.
B) risk aversion.
C) status quo bias.
D) mental accounting.
Loss Aversion
A concept in behavioral economics indicating that people tend to prefer avoiding losses to acquiring equivalent gains; it's the idea that the pain of losing is psychologically about twice as powerful as the pleasure of gaining.
Recognize the Loss
The accounting practice of formally acknowledging that a financial asset has decreased in value, typically realized through a transaction or assessment.
- Recognize concepts of loss aversion, mental accounting, and risk aversion in decision making.
Verified Answer
LD
Learning Objectives
- Recognize concepts of loss aversion, mental accounting, and risk aversion in decision making.