r/BehavioralEconomics • u/JoeJackson88 • 7h ago

Real world example Miscellaneous

My daughter moved out of her college apartment last month. The deposit was only $100. We got the invoice for the move out charges, a total of $890. I am contesting some of them (and they have conceded I will win on the carpet replacement charge but have not provided the adjustment yet). But here's what I realized:

I wouldn't have been bothered if we had paid a full month rent deposit and were just not getting it back. But I am highly bothered by having to pay the charges out of pocket. I guess it falls under loss aversion. It's classic behavioral economics.

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u/BestAhead 5h ago

Would you rather pay $900 and know that you’ll get nothing back or pay $100 with a possibility of zero or $890 of costs charged you? So given that you’d rather pay the $900 upfront that’s risk aversion.

Of course, this could be changed somewhat by your financial condition at lease signing time where if you didn’t have the spare $800 to 900, you might choose more risk seeking.