Sam buys an autographed picture of his favorite football player for $300 on eBay.Upon showing it off,he is offered $350 for it.Sam indicates that he could not possibly sell for less than $450.This is an example of _______________.

Question

Quizplus · Accepted Answer

This is an example of the endowment effect, which refers to the tendency for individuals to overvalue items they own or possess. Sam values the autographed picture at $450 simply because he now owns it, even though he only paid $300 for it. This bias can make it difficult for people to make rational decisions about selling or trading items.

Sam Buys an Autographed Picture of His Favorite Football Player