A person is more likely to drive across town to save $5 on the purchase of a $10 calculator than drive across town to save $5 on the purchase of a $100 coat. This best describes the behavioral bias of _____.
A) sunk cost fallacy
B) hyperbolic discounting
C) falling prey to framing effects
D) overconfidence

Question

Quizplus · Accepted Answer

This scenario illustrates the framing effect, where the decision to save $5 is influenced by how the savings are framed relative to the total cost of the item (a larger percentage saving on the calculator versus a smaller percentage saving on the coat), rather than the absolute value of the savings.

A Person Is More Likely to Drive Across Town to Save