_______ most commonly contributes to loss-averse behavior.
A) The availability heuristic
B) The framing effect
C) Confirmation bias
D) The gambler's fallacy

Question

Quizplus · Accepted Answer

The framing effect refers to the idea that people react differently to the same information depending on how it is framed or presented to them. In the context of loss aversion, people tend to be more risk-averse when potential losses are presented as gains that can be lost, rather than as losses that can be avoided. This framing effect contributes to loss-averse behavior because people are more motivated to avoid losses than to seek out gains, and they are more likely to take risks when they feel there is something to be gained rather than something to be lost.

_______ Most Commonly Contributes to Loss-Averse Behavior