A behavioral economist would say that people who hold on to a failing stock because they paid so much money for it are overvaluing the present relative to the future.

Question

Quizplus · Accepted Answer

This behavior is better described as an example of the "sunk cost fallacy," where individuals continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), rather than overvaluing the present relative to the future.

A Behavioral Economist Would Say That People Who Hold on to a Failing