If the utility you derive from your next dollar of wealth increases by less than a loss of a dollar reduces it, you are exhibiting ________.
A) loss aversion
B) regret avoidance
C) mental accounting
D) framing bias

Question

Quizplus · Accepted Answer

This is the definition of loss aversion, where individuals are more sensitive to losses than gains of equal magnitude. It means that the pain of losing a dollar is greater than the pleasure of gaining it, making people less likely to take risks or make investments that could result in losses.

If the Utility You Derive from Your Next Dollar of Wealth