PrepTest 148, Section 4, Question 3
Psychologist: In our study, participants who were offered(47 more words not shown)
Which one of the following,(11 more words not shown)
- AA person’s assessment(19 more words not shown)
- BPeople are usually(19 more words not shown)
- CThe amount a(20 more words not shown)
- DPeople tend to(20 more words not shown)
- EPeople are more(13 more words not shown)
Reading the argument
That mug is mine now.
Owning the mug could change how someone values it. Before receiving it, the participant is deciding whether getting a mug is worth spending more than $5. Afterwards, the participant is deciding whether losing a mug they already own is worth receiving $5. The mugs can be very similar while those two decisions feel different.
What we’re looking for
That's the explanation I'd look for: people may place a higher value on keeping something they own than on acquiring a similar thing they don't own. We don't need to discover the mug's objectively correct price. We need to explain why the amount participants will pay is lower than the amount they will accept to give it up.
Working the answers
- A
The mugs are very similar, so pointing to their inherent properties doesn't explain the change between buying and selling. We need some relevant difference in the situations. Ownership supplies one; A doesn't show that the mugs themselves have different qualities that account for the prices.
- B
The participants were asked about selling immediately after receiving the mug. They haven't owned it for a long time. A problem judging the value of a long-held possession therefore doesn't explain this immediate difference.
- C
We aren't given different past sale prices that could explain the two valuations. And a rule about what determines someone's willingness to spend doesn't, by itself, explain why that same person demands more money when selling. The ownership contrast remains unresolved.
- DCorrect
People tend to value an object more once they own it than they value a similar object they don't own. That fits both sides of the study: they won't pay over $5 to acquire the mug, but once it is theirs, they want over $5 to part with it. The higher selling price can come from their relationship to the mug rather than from a change in the mug's qualities.
- E
This compares gifts with purchases. But the first situation involves an opportunity to purchase a mug, not a mug the participant already bought. The second involves a mug the participant now owns. E doesn't make the ownership comparison we need. Nor does saying gifts are more likely to be undervalued explain why people demand more money to surrender this newly received mug.
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