Answer:
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.
Answer:
The answer is B. loss aversion and anchoring
Explanation:
Loss aversion is a theory that refers to the tendency of people to prefer avoiding losses in order to acquire equivalent gains. For instance, when someone prefers gaining $100 over losing $100. The reason behind this is because the pain of losing is twice as much as the pleasure of gaining.
Anchoring is the phenomenon of using an event or something as a point of reference when a comparison is being done.
From the scenario given above, we see that Barb and Ken are averse to losing $50,000 on the house they bought for $300,000. The point of reference for this comparison will be the $300,000 they paid for the house initially.
