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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.
Sit hoc ultimum bonorum, quod nunc a me defenditur; Itaque rursus eadem ratione, qua sum paulo ante usus, haerebitis.
Negabat igitur ullam esse artem, quae ipsa a se proficisceretur; Ut alios omittam, hunc appello, quem ille unum secutus est. Sed utrum hortandus es nobis, Luci, inquit, an etiam tua sponte propensus es? Aliter enim nosmet ipsos nosse non possumus. Itaque in rebus minime obscuris non multus est apud eos disserendi labor. Non potes, nisi retexueris illa. Praeterea sublata cognitione et scientia tollitur omnis ratio et vitae degendae et rerum gerendarum. Tecum optime, deinde etiam cum mediocri amico.
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed eum qui audiebant, quoad poterant, defendebant sententiam suam. Si verbum sequimur, primum longius verbum praepositum quam bonum. Cetera illa adhibebat, quibus demptis negat se Epicurus intellegere quid sit bonum. Hoc loco tenere se Triarius non potuit. Duo Reges: constructio interrete.
Atqui haec patefactio quasi rerum opertarum, cum quid quidque sit aperitur, definitio est. Stuprata per vim Lucretia a regis filio testata civis se ipsa interemit. Quod idem cum vestri faciant, non satis magnam tribuunt inventoribus gratiam. Facit igitur Lucius noster prudenter, qui audire de summo bono potissimum velit; Ita relinquet duas, de quibus etiam atque etiam consideret. Dempta enim aeternitate nihilo beatior Iuppiter quam Epicurus; Vitiosum est enim in dividendo partem in genere numerare. Equidem e Cn.
Non quaero, quid dicat, sed quid convenienter possit rationi et sententiae suae dicere. Respondent extrema primis, media utrisque, omnia omnibus. Aliter autem vobis placet. Vestri haec verecundius, illi fortasse constantius.
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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