The Default Effect

question 14

Multiple Choice

The default 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.

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Definitions:

Power to Bind

The authority granted to an agent or representative to enter into contracts or agreements that legally bind the principal to the terms.

Contract

An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable by law.

Right to Control

The authority or power to regulate, direct, or command something or someone's actions or decisions.

Conduct

Refers to the manner in which an individual behaves, especially within a professional or formal context.