In the endowment effect and the sunk cost effect, consumers underestimate:
A)motivation
B)expected utility
C)opportunity costs
D)selective processing
E)the diminishing sensitivity effect

Question

Quizplus · Accepted Answer

The endowment effect and sunk cost effect both involve consumers placing greater value on things they already own or have invested in, even if it does not make rational economic sense. This means they are underestimating the opportunity costs - the potential benefits they could receive from investing or spending their resources differently.

In the Endowment Effect and the Sunk Cost Effect, Consumers