Sally buys a painting at a garage sale for $25.A houseguest sees the painting hanging in Sally's house and offers to buy the painting from her for $50.Sally does not want to sell the painting despite the fact that she would never pay this much for a similar painting.

Question

Quizplus · Accepted Answer

The endowment effect is the tendency for individuals to value an object more once they own it. In this case, Sally is reluctant to sell the painting for $50 even though she only paid $25 for it because she has developed an attachment to it since owning it.

Sally Buys a Painting at a Garage Sale for $25