Behavioral Decision Theory and Behavioral Economics - Quiz

1. Mental accounting refers to:

Spending without planning

Ignoring budgets

Separately coding money into mental categories

Treating all money as equally valuable

2. “Herd behavior” refers to:

Ignoring social influence

Avoiding trends

Buying based on personal preferences only

Imitating the actions of a larger group

3. In BDT, loss aversion means consumers:

Ignore emotional responses

Seek out losses

Value losses more than equivalent gains

Are risk-loving

4. The endowment effect refers to consumers:

Preferring new brands

Always choosing the lowest price

Ignoring sunk costs

Valuing products they own more highly than those they do not

5. Heuristics are:

Laws regulating markets

Simple rules of thumb for making decisions

Ways to ignore advertising

Complex statistical models

6. The “anchoring effect” influences decisions by:

Comparing all options equally

Starting from an initial value and adjusting insufficiently

Ignoring reference points

Focusing only on emotional responses

7. The “availability heuristic” describes a tendency to:

Focus on unavailable options

Ignore past experiences

Rely on information that is easy to recall

Seek complex data

8. Overconfidence bias leads consumers to:

Overestimate their ability to make good decisions

Rely on others’ advice

Ignore their own preferences

Accurately assess their knowledge

9. Confirmation bias in consumer behavior means:

Focusing on information that supports one’s preconceptions

Seeking information that challenges beliefs

Giving equal weight to all information

Ignoring prior experiences

10. Choice overload can result in:

Faster decision making

Improved customer loyalty

Decision paralysis or less satisfaction

More rational choices

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