The willingness to sacrifice some economic payoff to avoid a potential loss is:

Question

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The willingness to sacrifice some economic payoff to avoid a potential loss is a classic example of risk aversion behavior. It means that individuals prefer avoiding potential losses over acquiring potential gains. This behavior is rational, as individuals are trying to protect themselves from potential harm or loss. Option A is incorrect because the behavior is not irrational. Option B is incorrect because bounded rationality refers to the limitations of our decision-making capabilities, not to risk aversion. Option C is incorrect because concern about fairness is not specifically related to this behavior.

The Willingness to Sacrifice Some Economic Payoff to Avoid a Potential