Question

Behavioral economists attribute some consumer behavior to the endowment effect. Which of the following is an example of the endowment​ effect? An example of the endowment effect is: A. buying lottery tickets with an expected value that is less than their price. B. being unwilling to sell a vase for a price that is greater than the price you would be willing to pay to buy the vase if you​ didn't already own it. C. being willing to will your descendents a car upon your death that you otherwise could have sold for a substantial price. D. being unwilling to sell a painting that you already own.

Answer 1

Answer: being unwilling to sell a vase for a price that is greater than the price you would be willing to pay to buy the vase if you​ didn't already own it.

Explanation: In simple words endowment effect refers to the phenomenon of psychology which states that a normal individual would be willing to retain an object that he owns rather than buying the same object when he or she do not own it.

Thus, unable to sell a vase even at a greater price that the owner would pay for that vase if he do not own is a clear depiction of endowment effect.