A computer store that is 7 miles from your house is selling a laptop for $800. The same laptop is selling for $825 at a store that is only 5 miles from your home. You decide that it is not worth
Your time and effort to drive the extra 2 miles. On the other hand, you drive 2 miles out of
Your way to buy gas at a gas station for $2.60 a gallon because the gas stations within a mile of
Your home price their gas at $2.70 a gallon, and your SUV holds 30 gallons of gas. What
Behavioral bias does this describe?
A)compartmentalization
B)relativism
C)narcissism
D)overconfidence

Question

Quizplus · Accepted Answer

This scenario describes relativism, where the decision-making is influenced by the relative difference in prices rather than the absolute value or savings. In the case of the laptop, the small percentage difference in price does not motivate the extra drive, whereas the perceived larger relative saving on gas does, despite the actual dollar savings being much smaller.

A Computer Store That Is 7 Miles from Your House