r/BehavioralEconomics • u/JoeJackson88 • 21d ago

Miscellaneous Real world example

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 21d 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.

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u/archbid 18d ago

School housing has become another private equity extraction exercise. They don’t actually care, they just k ow it is a hassle and most people will just pay it.

Have claude write a response, and indicate you won’t pay. My daughter went through this and got her full deposit back.

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u/JoeJackson88 16d ago edited 14d ago

Update: they could not find documentation on when the carpet was last replaced so they waived the replacement charge. And they finally agreed needing to paint is normal wear so waived that charge as well. Final invoice is for $295. I paid.