Question

When people want to maintain their current lifestyles and are reluctant to change, they may exhibit what is known as the

hot-hand bias.

gambler’s bias.

status quo bias.

hot-hand fallacy.

gambler’s fallacy.

In behavioral economics, ________ suggests that people place more value on avoiding losses than attempting to realize gains.

the availability heuristic

the ambiguity effect

prospect theory

gain aversion

the bandwagon effect

Answer 1

1. Option C.

• When people want to maintain their current lifestyle and are reluctant to change, they may exhibit what is known as the status quo bias.
• Status quo bias is a situation in which people are resistant to any new changes as they fear that changing from a current situation can make them incur losses rather than gains. This thought makes them reluctant to change their lifestyle or forces them to maintain their current lifestyle.

2. Option C.

• In behavioural economics, prospect theory suggests that people place more value on avoiding losses than attempting to realize gains.
• According to the prospect theory people tend to place value on thing's based on their losses or gains rather than placing values on benefits they can acquire.
• They try to place more value on avoiding losses as they wish to have greater grains from what ever they do.