Bad Investment in AP Psychology

Definition

A bad investment refers to a financial decision that results in a loss rather than a gain. It is an investment that fails to generate the expected return or loses value.

Related terms

sunk cost fallacy: This refers to the tendency of individuals to continue investing time or resources into something that has already proven unprofitable, simply because they have already invested so much.

hindsight bias: This is the tendency for people to believe falsely that they accurately predicted an outcome after it has occurred.

confirmation bias: This is the tendency for individuals to search for or interpret information in a way that confirms their preconceptions or beliefs.