For many people, a 50-50 flip of a coin for $100 might not be worth as much as a sure promise of $50, even though the gamble is mathematically worth twice as much as the sure thing. This is an example of ________.
A) selective perception
B) self-serving bias
C) risk aversion
D) availability bias
E) confirmation bias

Question

Quizplus · Accepted Answer

This scenario is an example of risk aversion, which occurs when individuals prefer a certain outcome over a higher expected value gamble. In this case, people are willing to give up some potential gain in order to avoid the risk of losing the entire amount.

For Many People, a 50-50 Flip of a Coin for $100