In this video I introduce the sunk-cost fallacy, which is when we make present decisions based on previous investments which aren’t relevant. This fallacy can occur in the form of gamblers or investors who make increasingly risky decisions in order to make up for past losses. Tversky and Kahneman have suggested that part of the reason for this fallacy is … Read More
Approach and Avoidance Motivations
Another way of categorizing motivations is to consider them as either approach motivations or avoidance motivations. An approach motivation is a drive to experience a positive outcome, while an avoidance motivation is a drive to not experience a negative outcome. The relative strength of these motivations may not be equal and some research has suggested that motivations to avoid loss can … Read More