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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.
Idem fecisset Epicurus, si sententiam hanc, quae nunc Hieronymi est, coniunxisset cum Aristippi vetere sententia. Itaque contra est, ac dicitis; Quantam rem agas, ut Circeis qui habitet totum hunc mundum suum municipium esse existimet? Ad eas enim res ab Epicuro praecepta dantur. Cur igitur easdem res, inquam, Peripateticis dicentibus verbum nullum est, quod non intellegatur? In quo etsi est magnus, tamen nova pleraque et perpauca de moribus.
Bonum patria: miserum exilium. Nam quibus rebus efficiuntur voluptates, eae non sunt in potestate sapientis. Quid, si non sensus modo ei sit datus, verum etiam animus hominis? Quae iam oratio non a philosopho aliquo, sed a censore opprimenda est.
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Immo istud quidem, inquam, quo loco quidque, nisi iniquum postulo, arbitratu meo. Hoc non est positum in nostra actione. Quae cum ita sint, effectum est nihil esse malum, quod turpe non sit. Duo Reges: constructio interrete.
Sed ne, dum huic obsequor, vobis molestus sim. Philosophi autem in suis lectulis plerumque moriuntur. Fortitudinis quaedam praecepta sunt ac paene leges, quae effeminari virum vetant in dolore. Quamvis enim depravatae non sint, pravae tamen esse possunt. Indicant pueri, in quibus ut in speculis natura cernitur. Quod quidem iam fit etiam in Academia. Scaevola tribunus plebis ferret ad plebem vellentne de ea re quaeri. Tria genera bonorum; Hoc loco tenere se Triarius non potuit. Hoc loco tenere se Triarius non potuit.
Itaque vides, quo modo loquantur, nova verba fingunt, deserunt usitata. Erat enim Polemonis. Quam ob rem tandem, inquit, non satisfacit? Isto modo ne improbos quidem, si essent boni viri.
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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