Refer to the scenario below to answer the following questions.
The Loaned Car (Scenario)
Colleen is a student, and her older brother has loaned her an old car. The car is in need of several repairs before she will feel comfortable driving it.
-Colleen's brother feels that the car is worth repairing because he has owned several cars made by the same manufacturer, and he has driven this particular car for several years. He also points out that he has invested hundreds of dollars in maintenance and repairs over the years, so it is obviously worth investing in new repairs to keep it running. Colleen's brother appears to be basing his decision on __________ but may also be making an error known as __________.
A) intuition; confirmation bias
B) escalation of commitment; hindsight bias
C) satisficing; hindsight bias
D) framing bias; overconfidence bias
E) intuition; sunk costs error

Question

Quizplus · Accepted Answer

Colleen's brother is relying on his intuition that because he has invested a lot in the car already, it is worth investing more in repairs. However, this is an example of the sunk cost fallacy, where people continue to invest in something because of the resources they have already put into it, rather than considering the current or future value of the investment.

Refer to the Scenario Below to Answer the Following Questions