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

---

Definitions:

Law on the Promotion

Legislation enacted to support and encourage certain activities, industries, or practices within a legal jurisdiction for economic or societal benefits.

Leasehold Estate

The leased property.

Premises

Land and the buildings on it, referred to especially in the context of business or law.

Rental Area

The specific portion of a property that is available for lease or rent to tenants.