Benji receives a $50 bonus this month because he had the highest sales at work.He likes the bonus,but in Benji's view it doesn't compensate for his $50 speeding ticket.Benji's feelings are best described by ____.
A) utility disparity
B) expected value
C) loss disparity
D) loss aversion

Question

Quizplus · Accepted Answer

Benji's feelings of the $50 bonus not being sufficient to compensate for his $50 speeding ticket suggest that he is experiencing loss aversion. This refers to the cognitive bias where individuals experience a greater psychological impact from losses compared to gains of equal value. In this case, Benji perceives the loss of the speeding ticket as more significant than the gain of the bonus, despite the fact that the two are equal in value.

Benji Receives a $50 Bonus This Month Because He Had