Author Question: One difficulty that homeowners often run into when they attempt to sell is that they tend to value ... (Read 48 times)

MirandaLo · **on:** Jun 22, 2018

One difficulty that homeowners often run into when they attempt to sell is that they tend to value their own property much higher than do other people, including real estate agents and potential buyers. This tendency is consistent with the

a. sunk cost principle.
b. endowment effect.
c. escalation effect.
d. concept of entrapment.

Question 2

Lamont has a 42-inch high definition television that he purchased for 1200 six months ago. He's decided to replace it with a larger 60-inch television, and tries to sell the smaller one for 1100 . He finds that nobody will buy it, and tells prospective buyers it is almost brand now and I'm selling it for less than it cost when I bought it Lamont fails to recognize that the same televisions can now be purchased for 800, and he is inflating the value of his television just because he owns it. This is called the

a. endowment effect.
b. disposition effect.
c. escalation effect.
d. sunk cost principle.