Endowment Effect and Market Anomalies Quiz

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What is the purpose of giving prospects a higher price according to the text?

To eliminate prospects from the consideration set

To anchor prospective customers towards higher price expectations (correct)

To encourage prospects to negotiate a lower price

To make the sale process faster

Why is the use of a wide range of prices recommended?

To prevent sales from being blocked by competitors

To confuse the prospects

To meet relevant competitors in the sales process (correct)

To simplify the negotiation process

How does anchoring relate to prospect theory?

Anchoring forms a reference point for individuals (correct)

Anchoring simplifies perception changes

Anchoring drives individuals to expect lower prices

Anchoring has no relationship with prospect theory

Why are anchors difficult to displace once placed?

Because gains from updating information may be perceived as insufficient Signup and view all the answers

What phenomenon has been documented in a number of studies according to the text?

Endowment effect Signup and view all the answers

Which set of authors conducted experimental tests on the Endowment Effect and Coase Theorem?

Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler Signup and view all the answers

In which journal did Fader publish his work on 'Modeling Loss Aversion and Reference Dependence Effects on Brand Choice'?

Marketing Science Signup and view all the answers

Who authored the paper 'Psychological Aspects of Price: An Empirical Test of Order and Range Effects'?

Paula Bennett, Mike Brennan, and Zane Kearns Signup and view all the answers

What is one of the main differences between lunch crowds and dinner crowds according to the text?

Dinner crowds seek and receive more benefits from the restaurant experience. Signup and view all the answers

How do seasonal factors contribute to price segmentation according to the text?

They allow for raising prices during peak seasons to capture profits and reducing prices during off-peak periods. Signup and view all the answers

How do gift-giving seasons impact customers' price sensitivity based on the text?

Customers show less price sensitivity during gift-giving seasons than other times. Signup and view all the answers

What opportunity do time-based segmentation hedges provide for suppliers according to the text?

To shift price-sensitive customers to off-peak periods. Signup and view all the answers

Why do business schools tend to compare the cost of tuition with future earnings of people with MBAs?

To influence students' willingness to enroll by showing a potential return on investment. Signup and view all the answers

In course design, are professors usually price-sensitive when selecting textbooks?

No, professors typically prioritize quality and relevance over price when choosing textbooks. Signup and view all the answers

Which psychological effect relates to prospect theory by influencing how individuals perceive prices?

Anchoring Signup and view all the answers

How does the comparison set effect play a role in the decision-making process regarding price sensitivity?

It influences individuals to compare prices with similar products in the market. Signup and view all the answers

Endowment Effect and Market Anomalies Quiz

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