What is an endowment effect O A The tendency of individuals

What is an endowment effect? O A. The tendency of individuals to value an item more when they own it than when they do not. For example, many people would refuse to pay S5 for a simple O B. The tendency of individuals to feel entitled to certain items whether they own them or not. For example, many people cannot afford to buy their own home ° C. The tendency of individuals to value an item more when they must purchase it than when they receive it for free. For example, many people would refuse to 0 D. It is the theory of consumer behavior that predicts that consumers behave a certain way because of the attributes they are endowed with. For example, the coffee mug but would also refuse to sell a simple coffee mug they won in a contest for the same price even though they got it for free. however, as Americans, they feel entitled to home ownership. sell a coffee mug they paid $5 for but would gladly sell the same coffee mug if they won it in a contest and got it for free. theory predicts that people endowed with musical abilities will become singers or musicians.

Solution

Option A.

Endowment effect is merely an emotional bias towards certain goods which they value more than its price. These goods would have been received freely in a contest or inherited from their parents and value it more because of emotional attachment they have developed towards it.