The stock of PHRM, the price declined by 30% when the FDA did not approve a promising new therapy the company was developing.Patrick holds on to the stock and constantly searches the internet looking for favorable stories about the company while ignoring a cascade of negative reports.This is an example of
A)anchoring.
B)overconfidence.
C)belief perseverance.
D)loss aversion

Question

Quizplus · Accepted Answer

Patrick's behavior is an example of belief perseverance, as he continues to hold onto the stock and searches for favorable stories despite negative news. This is a cognitive bias where people tend to cling to their beliefs even when faced with contradictory evidence. Anchoring, overconfidence, and loss aversion may be related biases, but they do not fully explain Patrick's behavior in this scenario.

The Stock of PHRM, the Price Declined by 30% When