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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.
Quod cum ille dixisset et satis disputatum videretur, in oppidum ad Pomponium perreximus omnes. Si quicquam extra virtutem habeatur in bonis. Quae animi affectio suum cuique tribuens atque hanc, quam dico. Nihil opus est exemplis hoc facere longius. Beatus autem esse in maximarum rerum timore nemo potest. Pugnant Stoici cum Peripateticis. Graecum enim hunc versum nostis omnes-: Suavis laborum est praeteritorum memoria. An est aliquid per se ipsum flagitiosum, etiamsi nulla comitetur infamia?
A villa enim, credo, et: Si ibi te esse scissem, ad te ipse venissem. Sin autem est in ea, quod quidam volunt, nihil impedit hanc nostram comprehensionem summi boni. Itaque contra est, ac dicitis; Nam ista vestra: Si gravis, brevis; Maximas vero virtutes iacere omnis necesse est voluptate dominante. Non enim iam stirpis bonum quaeret, sed animalis.
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed quid attinet de rebus tam apertis plura requirere? Quod ea non occurrentia fingunt, vincunt Aristonem; Minime id quidem, inquam, alienum, multumque ad ea, quae quaerimus, explicatio tua ista profecerit. Duo Reges: constructio interrete.
Quid est igitur, inquit, quod requiras? Quid igitur dubitamus in tota eius natura quaerere quid sit effectum? Varietates autem iniurasque fortunae facile veteres philosophorum praeceptis instituta vita superabat. Neminem videbis ita laudatum, ut artifex callidus comparandarum voluptatum diceretur. An hoc usque quaque, aliter in vita? Non igitur de improbo, sed de callido improbo quaerimus, qualis Q. Quodcumque in mentem incideret, et quodcumque tamquam occurreret. Tu vero, inquam, ducas licet, si sequetur; Causa autem fuit huc veniendi ut quosdam hinc libros promerem.
Sit hoc ultimum bonorum, quod nunc a me defenditur; Potius inflammat, ut coercendi magis quam dedocendi esse videantur. Haec quo modo conveniant, non sane intellego. Isto modo, ne si avia quidem eius nata non esset. Nunc ita separantur, ut disiuncta sint, quo nihil potest esse perversius. Immo videri fortasse. Quae similitudo in genere etiam humano apparet. An dubium est, quin virtus ita maximam partem optineat in rebus humanis, ut reliquas obruat? Solum praeterea formosum, solum liberum, solum civem, stultost; Quorum sine causa fieri nihil putandum est.
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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