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Monica is a wealthy, experienced investor. Larry is experienced with investing, but he is
significantly less wealthy than Cecilia. Both are considering the same investment, but they value
it differently because they perceive the potential utility differently if the investment does well.
This is an example of:
Gambler's fallacy
Dunning Kruger effect
Mental accounting
Prospect theory
Confirmation bias

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  • 1. Monica is a wealthy, experienced investor. Larry is experienced with investing, but he is significantly less wealthy than Cecilia. Both are considering the same investment, but they value it differently because they perceive the potential utility differently if the investment does well. This is an example of: Gambler's fallacy Dunning Kruger effect Mental accounting Prospect theory Confirmation bias