The Endowment Effect

question 35

Multiple Choice

The endowment effect:

• A) is making attributions to the person or the situation
• B) is negotiators believing that their ability to be correct or accurate is greater than actually true
• C) is drawing conclusions from small sample sizes
• D) is the tendency to overvalue something you own or believe you possess

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Definitions:

Intended Target

The specific group, population, or individual that a particular action, message, or strategy is aimed at.

Formal Hierarchy

An organized structure where individuals or groups are ranked one above the other according to status or authority.

Equity Allocation

Equity allocation in negotiations refers to the process of distributing resources, rights, or responsibilities among parties in a manner deemed fair or equitable.

Magnitude

The size, extent, or importance of something.