Riley has a new tennis racket for which she paid $200. Haley would like to buy the racket from Riley. Assuming Riley's decision is only influenced by the endowment effect, which of the following amounts would most likely represent how much Riley would have to receive to be willing to sell the racket?

Question

Quizplus · Accepted Answer

The endowment effect is a psychological phenomenon where people ascribe more value to things merely because they own them. Therefore, Riley would likely require more than the $200 she paid to be willing to sell the racket, making $250 a plausible amount reflecting this effect.

Riley Has a New Tennis Racket for Which She Paid