If You Exhibit the Endowment Effect as a Decision Maker

question 285

Multiple Choice

If you exhibit the endowment effect as a decision maker, then you are

• A)deciding on the basis of sunk costs.
• B)buying something you can't really afford because you expect to save in the future.
• C)ignoring non-monetary opportunity costs.
• D)consuming based on celebrity endorsements.

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Definitions:

Dot Com Bubble

A period of excessive speculation and investment in Internet-related companies during the late 1990s, leading to a market crash in 2000.

Stock Market

A public marketplace for buying and selling shares of publicly held companies, reflecting the economic trends and financial health of businesses and countries.

Declined

A decrease in quantity, quality, or strength; refusal to accept or agree to something, often a proposal or request.

Mikhail Gorbachev

The last leader of the Soviet Union, known for his policies of glasnost (openness) and perestroika (restructuring), leading to the end of the Cold War.