Suppose a Baseball Team Offers a Lottery for the Random

question 63

Multiple Choice

Suppose a baseball team offers a lottery for the random chance to buy season tickets at a deep discount. The fans who paid full price for season tickets are more likely to attend games than the fans who bought discounted season tickets. This best describes the behavioral bias of _____.

• A) sunk cost fallacy
• B) hyperbolic discounting
• C) falling prey to framing effect
• D) overconfidence

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Definitions:

Fixed Assets

Long-term tangible assets used in the operations of a business, not expected to be converted to cash in the short term.

Accounting Period

A specific duration of time for which financial statements are prepared, often a fiscal quarter or year, used to measure financial performance.

Short-Term Lease

A lease agreement with a duration, typically less than a year, used for temporary asset usage.

Fixed Asset

A long-term tangible piece of property that a firm owns and uses in its operations to generate income.