Ira invested in a stock six years ago.Since then,the value of her stock has reduced drastically.Ira is hesitant to pull out her money from the stock because she feels that she has already invested a lot of time and money into it.She feels that it is too late to make any decisions about her investment.Ira's belief best explains
A)the Flynn effect.
B)the sunk cost fallacy.
C)functional fixedness.
D)benefit finding.

Question

Quizplus · Accepted Answer

Ira's reluctance to pull out her money from the stock because she has already invested a lot of time and money into it is an example of the sunk cost fallacy. This is a cognitive bias where people continue to invest in a project or decision, even when the costs outweigh the benefits.

Ira Invested in a Stock Six Years Ago