102. Read the following passage, then answer the question below.

Classical economics assumes that people weigh gains and losses by their size alone: finding fifty dollars should please a person exactly as much as losing fifty dollars displeases them. Experiments by psychologists Daniel Kahneman and Amos Tversky in the 1970s cast doubt on this assumption. They found that the pain of losing an item is roughly twice as strong as the pleasure of gaining an equivalent one, a pattern they called loss aversion.

Loss aversion helps to explain a number of behaviors that seem irrational at first glance. In one well-known study, half of a group of students were given coffee mugs, while the others received nothing. When owners were asked how much they would accept to give up their mugs, they named prices about twice as high as what non-owners were willing to pay. The mere fact of ownership, researchers concluded, had increased the mug's value in its owner's eyes, an effect termed the endowment effect. Investors show a similar bias when they hold on to falling stocks for too long, since selling would turn a paper loss into a real one.

Critics, however, note that laboratory results do not always carry over to everyday decisions. People who trade goods regularly, such as experienced dealers, display little endowment effect, which suggests that the bias may weaken with experience. Some economists therefore treat loss aversion not as a universal law but as a tendency whose strength depends on context. Nevertheless, businesses have been quick to exploit it: free trials, for instance, encourage customers to treat a product as already theirs, so canceling feels like a loss. Whether such tactics are clever or manipulative is a question the research itself cannot settle.

According to Kahneman and Tversky, the pain of losing an item compared with the pleasure of gaining an equal one is