Asked by
Haylee Roberts
on Oct 17, 2024
Verified
In the context of loss aversion, which of the following statements is true of endowment effect?
A) People ascribe greater value to things they already own when compared with objects owned by someone else.
B) People tend to make more losses than gains when making investments based on the suggestions of their peers.
C) People are reluctant to give up on a venture because of past investment.
D) People tend to report falsely, after the fact, that they accurately predicted an outcome.
Endowment Effect
The cognitive bias causing individuals to ascribe higher value to things merely because they own them.
Loss Aversion
A psychological principle suggesting people tend to prefer avoiding losses to acquiring equivalent gains.
- Understand the principle of loss aversion and associated cognitive biases.
Verified Answer
OA
Learning Objectives
- Understand the principle of loss aversion and associated cognitive biases.