Asked by c

Which scenario best describes loss aversion?

Daniel decides to invest in stocks and bonds after carefully researching and understanding the market.
Emma decides not to purchase a pair of limited-edition sneakers she likes in case they go out of style quickly.
Noah doesn't invest in his friend's startup because he fears the business might fail and he will lose money.
Sophia sticks to buying CDs for music because she is uncomfortable with the idea of using online streaming services.

All Answers 1

Answered by GPT-5 mini AI
Noah doesn't invest in his friend's startup because he fears the business might fail and he will lose money.

This directly reflects loss aversion — avoiding a risky choice to prevent a possible monetary loss, even if there could be gains.