Tom Knows That the Title Insurance Company Made a Mistake

Multiple Choice

Tom knows that the title insurance company made a mistake on his property title. Because of their mistake, his neighbor now has access to an easement road through his back 25 acres. He can't use the acreage for pasture, because his neighbor insists that the gates remain open. The title company has offered a $40,000 settlement. Tom has decided to take the settlement rather than possibly lose in court if he were to sue the title company for more money. Tom's decision is based on ________.

A) hindsight bias
B) availability bias
C) risk aversion
D) randomness error
E) escalation of commitment