37.3k views
4 votes
____________- refers to the tendency for owners and potential sellers of goods and products to value those products more than potential buyers do

User Lbusett
by
6.0k points

1 Answer

6 votes

Answer:

Endowment effect

Step-by-step explanation:

The endowment effect occurs when an owner and potential seller of an item or product, becomes attached to the item and as such, attaches more value to it, than what it is actually worth.

The endowment effect also applies to a case where a potential buyer undervalues an item on sale, because he already has a similar item, which he has gotten attached to over time and considers to be more valuable. For example, a person may value his old car, more than a fairly used car on sale, even if the fairly used car is in reality, more valuable.

This means the value the seller of the item has placed on that item is higher than what the buyer is willing to pay to get it.

User Sorenkrabbe
by
6.7k points