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Misperception
A misunderstanding or incorrect interpretation of a situation, often leading to erroneous decisions or beliefs.
Opportunity Costs
The price paid for not choosing the second-best option available when deciding.
Risk Aversion
A preference for avoiding loss over making a gain, indicating a greater sensitivity to losses than to equivalent gains.
Mental Accounting
A concept in behavioral economics where individuals categorize and treat money differently based on subjective criteria, often leading to irrational financial decisions.
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