Sunk Cost Fallacy
The tendency for individuals to continue a behavior or endeavor as a result of previously invested resources (time, money, or effort) rather than future potential benefits.
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“user finance behavior”
Conjunction Fallacy
A logical fallacy where people assume that specific conditions are more probable than a single general one.
Intertemporal Choice
The study of how people make choices about what and how much to do at various points in time, often involving trade-offs between costs and benefits occurring at different times.
Subadditivity Effect
A cognitive bias where the total probability assigned to a set of events is less than the sum of the probabilities assigned to each event individually.
Discounted Utility
A concept in behavioral economics that describes how future benefits are perceived as less valuable than immediate ones.
Risk-as-Feelings Theory
A theory that emphasizes the role of emotions in risk perception and decision-making, where feelings about risk often diverge from cognitive assessments.
Zero-Risk Bias
A cognitive bias where people prefer the option that seems to eliminate risk entirely, even if another option offers a greater overall benefit.
Expected Utility Theory
A theory in economics that models how rational individuals make decisions under risk by maximizing the expected utility of their choices.
Irrational Escalation
The phenomenon where people continue a failing course of action due to the amount of resources already invested.