Harvey Miller owns a baseball that was hit for a home run by Ted Williams.Harvey, a long-time Boston Red Sox fan, recently refused to sell his baseball for $75,000 even though he would not have paid someone more than $10,000 for the baseball if he did not already own it.Harvey explained his decision not to sell the baseball by noting that: "Ted Williams was my hero.This baseball has a great deal of sentimental value for me." Which of the following can explain Harvey's behavior?
A)the difference between implicit and explicit costs
B)the scarcity of home run baseballs hit by Ted Williams
C)the endowment effect
D)how social influences can affect consumption choices

Question

Quizplus · Accepted Answer

The endowment effect refers to the tendency for people to value an object more highly simply because they own it. This seems to be the case for Harvey, who values the baseball much more than what he would have paid for it simply because of its sentimental value and his attachment to Ted Williams. It is not explained by the other options, as A) the implicit and explicit costs do not apply in this scenario, B) while scarcity may influence the value of an object, it is not the only explanation for Harvey's behavior, and D) social influences may be underlying factors, but they are not the main explanation for Harvey's behavior as outlined in the scenario.

Harvey Miller Owns a Baseball That Was Hit for a Home