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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.
Reguli reiciendam; Ergo infelix una molestia, fellx rursus, cum is ipse anulus in praecordiis piscis inventus est? Cenasti in vita numquam bene, cum omnia in ista Consumis squilla atque acupensere cum decimano. Sin eam, quam Hieronymus, ne fecisset idem, ut voluptatem illam Aristippi in prima commendatione poneret.
Non laboro, inquit, de nomine. Quam multa vitiosa! summum enim bonum et malum vagiens puer utra voluptate diiudicabit, stante an movente? Gerendus est mos, modo recte sentiat. Nemo igitur esse beatus potest. Et quod est munus, quod opus sapientiae? Certe nihil nisi quod possit ipsum propter se iure laudari. Quis suae urbis conservatorem Codrum, quis Erechthei filias non maxime laudat? An potest cupiditas finiri?
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Si stante, hoc natura videlicet vult, salvam esse se, quod concedimus; Levatio igitur vitiorum magna fit in iis, qui habent ad virtutem progressionis aliquantum. In eo enim positum est id, quod dicimus esse expetendum. Cuius ad naturam apta ratio vera illa et summa lex a philosophis dicitur. Hos contra singulos dici est melius. Bona autem corporis huic sunt, quod posterius posui, similiora. Duo Reges: constructio interrete. Dici enim nihil potest verius.
Non minor, inquit, voluptas percipitur ex vilissimis rebus quam ex pretiosissimis. Quid de Platone aut de Democrito loquar? Ne tum quidem te respicies et cogitabis sibi quemque natum esse et suis voluptatibus? Utram tandem linguam nescio? Diodorus, eius auditor, adiungit ad honestatem vacuitatem doloris. Non risu potius quam oratione eiciendum?
Sed haec ab Antiocho, familiari nostro, dicuntur multo melius et fortius, quam a Stasea dicebantur. Eam si varietatem diceres, intellegerem, ut etiam non dicente te intellego; Cenasti in vita numquam bene, cum omnia in ista Consumis squilla atque acupensere cum decimano. Stoicos roga. Eorum enim est haec querela, qui sibi cari sunt seseque diligunt.
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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