1.3 5 Ways People Are Dumb With Money

Why might someone refuse to sell a valuable item they own for a price higher than they would pay to acquire it?

• They are being perfectly rational.

• They are experiencing the Endowment Effect.

• They are subject to the Sunk Cost Fallacy.

• They are demonstrating Transaction Utility.

What behavioral bias describes the tendency to continue an activity or project because of resources already invested, even if it's clearly not beneficial?

• Endowment Effect

• Mental Accounting

• Sunk Cost Fallacy

• Transaction Utility

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What is the term for the mental pleasure or pain derived from feeling like you paid more or less than something is "really worth," often disconnected from the actual happiness the item provides?

• Endowment Effect

• Sunk Cost Fallacy

• Mental Accounting

• Transaction Utility

What concept describes the tendency to separate money into different mental categories, treating it differently based on its source or intended use, even though all money is interchangeable?

• Endowment Effect

• Sunk Cost Fallacy

• Mental Accounting

• Transaction Utility