Deondre would like to buy a particular T-shirt from his university bookstore. However, he is only willing to pay $15 for the shirt and it is selling for $30. One day Deondre's family comes to visit, and they gift him the T-shirt. A friend later offers to buy the shirt from Deondre for $20, but he declines, saying that it's worth more. This is an example of:
A)the endowment effect.
B)status quo bias.
C)commitment bias.
D)anchoring.

Question

Quizplus · Accepted Answer

The endowment effect is demonstrated here, as Deondre values the T-shirt more highly once he owns it, despite previously not being willing to pay more than $15 for it.

Deondre Would Like to Buy a Particular T-Shirt from His