Asked by Ameer Salem on Jul 25, 2024

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Which pairs of effects are closely related?

A) Endowment and loss aversion
B) Framing and salience
C) Both of the above
D) None of the above

Endowment Effect

The phenomenon in which people ascribe more value to things merely because they own them.

Loss Aversion

A concept in behavioral economics stating that individuals prefer avoiding losses to acquiring equivalent gains, showing that losses have a greater emotional impact than gains.

Framing

The way information and messages are presented and structured to influence people's perceptions, decisions, and judgments.

  • Identify the relationship between various economic effects such as endowment and loss aversion, framing, and salience.
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CQ
Camila QuirogaJul 26, 2024
Final Answer :
C
Explanation :
Endowment and loss aversion are both related to the way people value things, with endowment referring to the tendency to place greater value on something once we own it, while loss aversion describes the tendency to feel a greater sense of loss from losing something than we would gain from gaining it. Framing and salience are both related to the way information is presented, with framing referring to the way information is presented in order to influence perception or decision making, and salience referring to the degree to which something stands out or is noticeable.