Endowment Effect

The endowment effect is a behavioral economics concept where individuals value items more once they own them, leading to irrational decision-making. This bias causes people to work harder to retain possessions than to acquire them initially, highlighting a disconnect from rational decision-making processes.

What is the endowment effect primarily about?

• Valuing things we don't own

• Valuing things based on market price

• Valuing things we own more

• Valuing things based on others' opinions

How does the endowment effect influence our decision-making?

• We make decisions based on others' choices

• We value maintaining what we have more

• We ignore the value of what we own

• We invest more in acquiring new things

Why is the endowment effect considered irrational?

• It is influenced by external factors

• It aligns with logical decision-making

• It contradicts rational decision-making

• It is based on market trends

In which field of study is the endowment effect categorized?

• Classical economics

• Behavioral economics

• Sociology

• Psychology

What does the endowment effect suggest about our efforts to retain possessions?

• We work less to keep what we own

• We work harder to keep what we own

• We prefer acquiring new possessions

• We are indifferent to losing possessions