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Marietha Davis
on Oct 25, 2024

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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.
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LifeWith De’aveyanNov 01, 2024
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