Question

We are less likely to gamble with profits than losses, but our choice varies by framing the problem as a win or a loss. This is due to

a) belief bias
b) framing effect
c) certainty effect
d) loss aversion

Answer 1

The correct answer is loss aversion.

Step-by-step explanation:

In this scenario, the correct answer is d) loss aversion. Loss aversion refers to the tendency of people to strongly dislike losses and prioritize avoiding them over seeking gains. In the context of gambling, individuals are more likely to take risks and gamble when framed as avoiding potential losses rather than pursuing potential gains. This is because the negative emotion associated with losing is typically stronger than the positive emotion associated with winning.