The endowment effect

A) states that people are often willing to make themselves worse off in order to make someone else worse off.

B) states that people are often willing to make themselves worse off in order to make someone else better off.

C) is the same as compartmentalizing.

D) states that we value an item more highly if we own it than if we do not own it.

Question

Social Studies

Armani Riddle

23 May, 13:35

The endowment effect

A) states that people are often willing to make themselves worse off in order to make someone else worse off.

B) states that people are often willing to make themselves worse off in order to make someone else better off.

C) is the same as compartmentalizing.

D) states that we value an item more highly if we own it than if we do not own it.

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Answers (1)

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Adrien Boyle · Answer 1

Option D

Explanation:

The endowment effect is a finding in psychology and behavioural economics that states people are more likely to hold on too an object they own rather than taking that same object which they don't own. Just like I have a pen, a blue pen to be precise, then I saw the same pen on the floor, instead of me taking that on the floor, I decide to hold on to the one I have other than taking that which is in the floor, this is called endowment effect. Option d explains more better.