Refer to the Scenario below to answer the questions that follow.
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; anchoring effect
B)escalation of commitment; hindsight bias
C)satisficing; framing bias
D)escalation of commitment; overconfidence bias
E)intuition; sunk costs error

Question

Quizplus · Accepted Answer

Colleen's brother is basing his decision on intuition, which is a quick and automatic judgment based on experience and knowledge. He is also making an error known as the sunk costs error, which is the tendency to continue investing in something because of the money that has already been invested.

Refer to the Scenario Below to Answer the Questions That