Behavioral Economics

Which of the following loss aversion strategies is this ad using?

• Progress Bar

• Protect People From Loss

• Coupon

• Free Trials & Samples

The tendencey to put more value on the things you already own is the endowment effect?

• True

• False

You buy a stock that has a price of $50 per share. A week later the stock's price drops to $25 per share (it's lost half its value). If you are affected by loss aversion you would be likely to…

• Look For Other Stocks To Buy

• Do Nothing

• Buy More Shares

• Sell The Shares

Unlike traditional economics, behavioral economics believes that…

• People will always update their viewpoints based on new information

• People behave in a rational way when making economic decisions

• People do not always behave in a rational way when making economic decisions

• There is no way to predict how people will make economic decisions

To do research only to confirm what you believe to be true and not challenge your beliefs is considered to be confirmation bias?

• False

• True

Your friend gives you an item. A day later, they offer to trade you another item of similar value. According to the endowment effect, most people would keep the item…

• They were offered second

• They think looks the best

• They received first

• They could sell for the most

A website tells you, "Only one left!" while shopping online. Which loss aversion strategy is this website using?

• Coupons

• Buy now, get free shipping

• Scarcity and urgency

• Free trials and samples

Each of the following statements is an example of confirmation bias EXCEPT...

• Seeking information that challenges your beliefs

• Only remembering details that uphold your beliefs

• Ignoring information that challenges your beliefs

• Interpreting information to support your existing beliefs

We should NOT ignore sunk cost?

• True

• False