The endowment effect
A) Refers to the observation that people tend to value something more highly when they own it than when they don't
B) Refers to the observation that people tend to value something more highly when they don't own it than when they do
C) Refers to the fact that when confronted with many alternatives, people sometimes avoid making a choice and end up with the option that is assigned as a default
D) Refers to the observation that people do not have a strong attachment to the status quo

Question

Quizplus · Accepted Answer

The endowment effect refers to people valuing something more highly simply because they own it, even if they didn't originally value it as highly before owning it. This is often observed in studies where participants are given an item and then asked to sell it or trade it for something else - they tend to place a higher value on the item they were given than what others are willing to pay for it.

The Endowment Effect