In the context of loss aversion, which of the following statements is true of endowment effect?
A)People ascribe greater value to things they already own when compared with objects owned by someone else.
B)People tend to make more losses than gains when making investments based on the suggestions of their peers.
C)People are reluctant to give up on a venture because of past investment.
D)People tend to report falsely, after the fact, that they accurately predicted an outcome.

Question

Quizplus · Accepted Answer

Endowment effect is a cognitive bias wherein people tend to ascribe greater value to things they already own as compared to the objects owned by someone else. This is due to the fact that owning something makes people feel emotionally and psychologically invested in it, which makes it harder for them to part with it or see it as being of lesser value.

In the Context of Loss Aversion, Which of the Following