When Jeremy looks at the monetary costs and benefits of moving, he found that he would be on net $50,000 better off by moving. He decides to stay where he is and not move. Which of the following could explain this behavior?
A) He has a longer time horizon than suggested by the discount rate he used to calculate the present value of the benefits of moving.
B) He believes that if the move does not work out, he could easily move back and be no worse off.
C) He dislikes the climate in the city he planned to move almost as much as his current city's climate.
D) He places a high psychic cost of moving.
Correct Answer:
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