Which concept states that once you own something, you value it more and demand more to give it up?

• A. Endowment Effect
• B. Omission Bias
• C. Risk Compensation
• D. Negativity Bias

Answer: (A)

The idea being tested is that ownership changes how much something is valued: once you possess an item, you tend to value it more and are slower to part with it. This is the Endowment Effect. It shows up in experiments where people are given a mug or a similar object and asked how much they’d sell it for, while others are asked how much they’d pay to acquire it. Owners demand a higher price to part with the item than non-owners would pay to obtain it, even though the objective value didn’t change. A key driver behind this is loss aversion: the idea that the potential loss of giving up the item feels more painful than the potential gain of acquiring it feels good. This helps explain why people, including vendors and buyers, can hesitate to trade items they already hold.

Other options describe different biases to do with actions vs. inactions, risk behavior, or negative versus positive information, but they don’t capture the way ownership itself shifts perceived value and willingness to part with something.