Clarke is moving out of town and wishes to sell his Legone motorbike. Patrick, Clarke's friend, is ready to purchase the motorbike. However, Clarke wants to charge a price that is much higher than Patrick is willing to pay. This scenario is an example of the _____.
A) attribute framing effect
B) eliminatory effect
C) goal framing effect
D) value-recognition effect
E) endowment effect

Question

Quizplus · Accepted Answer

This scenario is an example of the endowment effect, where Clarke values his possession (the motorbike) more than Patrick does as he has an emotional attachment to it. This leads him to charge a higher price, and Patrick may not be willing to pay that price.

Clarke Is Moving Out of Town and Wishes to Sell