Question

Read the scenario.

Guadalupe saved for months to buy a new laptop for college. She has enough for a basic model, but a high-end one caught her eye. It is priced a little more than she has saved. She's tempted by the thought of owning the best available option, but she's hesitant to part with the extra money. After some thought, she went for the basic model, fearing regret if she spent more.

What cognitive bias is represented in this scenario?

anchoring
loss aversion
herd mentality
the endowment effect

Answer 1

Loss aversion.

She chose the cheaper option because the potential loss (spending extra money and later regretting it) loomed larger than the potential gain of a better laptop. This fits loss aversion, not anchoring, herd mentality, or the endowment effect.