What Is the Endowment Effect

question 302

Multiple Choice

What is the endowment effect?

• A)the tendency of people to be unwilling to sell something they already own even if they are offered a price that is greater than what they would be willing to pay to buy the good if they did not already own it
• B)the tendency of people to be unwilling to sell something they already own because of its sentimental value
• C)the tendency of people to overstate the value of a good they already own even though similar items can be purchased at a lower price
• D)the sum total of assets that a person has acquired over the years

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Definitions:

James-Lange Theory

A theory hypothesizing that physiological arousal instigates the experience of emotion rather than the other way around.

Psychological

Relating to the mind or mental processes and how they affect behavior in different contexts.

Psychological Needs

Fundamental human requirements for mental well-being, including needs for autonomy, competence, and relatedness.

Bulimia Nervosa

An eating disorder characterized by repeated cycles of binge eating and purging.