If You Exhibit Endowment Effect, Then You

question 177

Multiple Choice

If you exhibit endowment effect, then you

• A) decide rationally when making decisions about selling but not when making decisions about buying.
• B) have a strong attachment to things you already own.
• C) buy something you cannot afford.
• D) decide rationally when making decisions about buying but not when making decisions about selling.

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Definitions:

Response Strengthened

This term describes the process by which a behavior becomes more likely to occur as a result of reinforcement.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a desired behavior increases the likelihood of the behavior occurring again.

Positive Reinforcement

A method of strengthening desired behaviors by presenting a desirable stimulus after the behavior occurs.

Probability

A measure or estimation of how likely it is that an event will occur, expressed as a number between 0 and 1, where 1 denotes certainty.