Greg spent the weekend in Las Vegas.He started out with $10,000 and won an additional $5,000.Greg was very risky with how he gambled with the $5,000 he had won.Greg was exhibiting the ________ effect.
A)disposition
B)house money
C)loss then risk aversion
D)Las Vegas
E)none of the above

Question

Quizplus · Accepted Answer

The "house money effect" refers to the tendency for people to take greater risks with money that they have won, as opposed to money they have earned or saved. In this scenario, Greg won an additional $5,000 and then became risky with how he gambled, which is consistent with the house money effect.

Greg Spent the Weekend in Las Vegas