Paul wins a $500 watch in a sweepstakes and decides to keep it,even though he says he would have preferred to win $500 cash.Knowing Paul's preferences,how can we explain his decision to keep it?
A) Paul has a cognitive bias, and it leads him to value the watch more because he owns it.
B) Paul has a cognitive bias; he is ignoring a nonmonetary opportunity cost of already owning the watch.
C) Paul's implicit cost of ownership makes him feel as though he should keep the watch.
D) All of these are true.
Correct Answer:
Verified
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