Barb and Ken purchased a house for $300,000 in 2005. When they needed to sell because of a job transfer in 2009, the house was appraised for $250,000 but they put it on the market for $300,000 anyway. The house is still on the market. Behavioral tendencies at work here may include:

A. representativeness and narrow framing. B. loss aversion and anchoring. C. familiarity bias and self attribution bias. D. overconfidence and representativeness.

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Business

Ellen Knight

9 May, 03:44

Barb and Ken purchased a house for $300,000 in 2005. When they needed to sell because of a job transfer in 2009, the house was appraised for $250,000 but they put it on the market for $300,000 anyway. The house is still on the market. Behavioral tendencies at work here may include:

A. representativeness and narrow framing. B. loss aversion and anchoring. C. familiarity bias and self attribution bias. D. overconfidence and representativeness.

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Answers (1)

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Elijah · Answer 1

B

Explanation:

On the basis of their actions in selling their house at $300,000 despite being use for years, their behavioral tendencies at work include loss aversion and anchoring.

Loss aversion is a psychology and decision taking theory where people try as much as possible to avoid making losses but make equivalent gain.

Anchoring is defined as a cognitive bias where the human being rely on an existing information as reference for decision making.