Fifi and Mimi Are Playing a Coin-Flipping Game

question 26

Multiple Choice

Fifi and Mimi are playing a coin-flipping game. Whenever the coin lands on heads, Fifi wins $1. If tails are flipped, Mimi wins $1. For the first 20 flips, the coin has landed on heads. "Time to switch," Fifi says, believing that tails are due to win. "You have heads, and I'll take tails." After switching, the coin, once again, lands on heads. In this example, Fifi has fallen victim to _____________.

• A) The illusory superiority effect
• B) Optimism bias
• C) The gambler's fallacy
• D) The sunk cost effect
• E) The representativeness heuristic

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Definitions:

Bid Competition

A procurement process where vendors or contractors submit their proposals or bids, competing to win a contract based on price, quality, and/or service criteria.

Upward Pressure

Forces or conditions within a market that cause prices to rise, often due to factors like increased demand, higher production costs, or supply shortages.

Would-Be Buyers

Potential customers who have shown interest in purchasing a product or service but have not yet made a purchase.

Competitive Auction

A bidding process where various buyers compete to acquire goods or services by offering increasingly higher prices.