A consumer is given the chance to buy a concert ticket for $50 and refuses.Later,that same consumer wins a free ticket to the concert.When asked to sell that ticket for $50,the consumer refuses,indicating that he would rather use the ticket himself.This is an example of
A)endowment effect.
B)salience.
C)framing bias.
D)irrational behavior.

Question

Quizplus · Accepted Answer

This scenario demonstrates the endowment effect, which is the tendency for individuals to value an object more highly because they own it. The consumer's refusal to sell the ticket for $50 after receiving it for free indicates that they place a higher value on it simply because it is now in their possession. The other options (salience, framing bias, irrational behavior) are not necessarily apparent in this scenario.

A Consumer Is Given the Chance to Buy a Concert