The endowment effect suggests that that people
A) have a strong attachment to their entitlement, regardless of whether they paid to acquire them.
B) have a strong sense of fairness.
C) are concerned about the welfare of others.
D) act in ways to distort market prices.

Question

Quizplus · Accepted Answer

The endowment effect refers to the tendency of people to overvalue objects, simply because they own them. This suggests that people have a strong attachment to their entitlement, regardless of whether they paid to acquire them. This effect has been demonstrated in numerous studies, and is considered a key factor in market inefficiencies.

The Endowment Effect Suggests That That People