While Walking Down the Street, Buford Is Approached by a Stranger

Multiple Choice

While walking down the street, Buford is approached by a stranger, who makes the following offer: "Let's flip a coin. If it's heads, I'll give you $1,000. If it's tails, you give me your wristwatch." Buford figures that his wristwatch is only worth $600, but it was a gift from his grandmother that he cherishes, so he decides not to accept the stranger's offer. Buford's decision can be best characterized as based on:

A) The sunk cost effect
B) The availability bias
C) The gambler's fallacy
D) Expected value
E) Expected utility