Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Does “owning” the extra credit and losing it make you value it more or less?
Expert Solution
Step 1
The answer to this question depends on the context in which the extra credit is being valued. In general, owning something and losing it can increase one's attachment to it, and therefore make one value it more. This is often referred to as the endowment effect, which is the idea that people value an item more simply because they own it.
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