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No, it's not just you — we all tend to overestimate the value of our possessions, and there's a name for it.
Idemne, quod iucunde? Sin laboramus, quis est, qui alienae modum statuat industriae? Nunc ita separantur, ut disiuncta sint, quo nihil potest esse perversius. Quae cum magnifice primo dici viderentur, considerata minus probabantur.
Bork Qui ita affectus, beatum esse numquam probabis; Disserendi artem nullam habuit. Primum quid tu dicis breve? Quid est, quod ab ea absolvi et perfici debeat? Id et fieri posse et saepe esse factum et ad voluptates percipiendas maxime pertinere. Haec et tu ita posuisti, et verba vestra sunt. Nihil sane. Nam memini etiam quae nolo, oblivisci non possum quae volo. Quare ad ea primum, si videtur; Nihil enim hoc differt. Sed quid sentiat, non videtis.
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
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Illa argumenta propria videamus, cur omnia sint paria peccata. Eadem nunc mea adversum te oratio est.
Te ipsum, dignissimum maioribus tuis, voluptasne induxit, ut adolescentulus eriperes P. Verba tu fingas et ea dicas, quae non sentias? Res enim fortasse verae, certe graves, non ita tractantur, ut debent, sed aliquanto minutius. Qui ita affectus, beatum esse numquam probabis; At ille pellit, qui permulcet sensum voluptate. Nunc dicam de voluptate, nihil scilicet novi, ea tamen, quae te ipsum probaturum esse confidam. Itaque ab his ordiamur.
There have been critics of the Endowment Heuristic, with some claiming it does not exist or at least is not as apparent in real life as in fixed experiments. For example, some argue that the results from the mug experiment (see the ‘In Practice’ section) was more due to artificial scarcity.
Mugs.
This 1991 paper by Daniel Kahneman, Jack Knetcsch and Richard Thaler describes the classic example of the endowment heuristic involving mugs. In it, participants were given a mug and then given the chance to trade it. They found that the value attributed to owned mugs was twice as high as they were actually willing to pay for such a mug that they did not own.
The endowment heuristic is part of behavioural economics, stemming from the fast and slow thinking mental model and relating closely to loss aversion.
Use the following examples of connected and complementary models to weave availability heuristic into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above.
Connected models:
- Fast and slow thinking: providing broader context to the endowment effect.
- Loss aversion and opportunity cost: a closely linked heuristic and bias.
- Lock in effect: and challenge of customer loyalty.
Complementary models:
- Design thinking: consider strategies to co-design and increase ownership of initiatives.
- Lean startup: iterating with minimum viable products, allowing audience groups to access and own quickly and cheaply.
Aristotle noted the tendency towards the Endowment Effect in Ancient Greece, when he explained: “For most things are differently valued by those who have them and by those who wish to get them: what belongs to us, and what we give away, always seems very precious to us.”
However, the term itself was first coined by the behavioural economist Richard Thaler in his 1980 paper entitled ‘Toward a Positive Theory of Consumer Choice.’
My Notes
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