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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 potest esse dies saepius, qui semel fuit? In quo etsi est magnus, tamen nova pleraque et perpauca de moribus. Qui convenit? Habent enim et bene longam et satis litigiosam disputationem. Sed tamen enitar et, si minus multa mihi occurrent, non fugiam ista popularia. Sed venio ad inconstantiae crimen, ne saepius dicas me aberrare; Et harum quidem rerum facilis est et expedita distinctio. At modo dixeras nihil in istis rebus esse, quod interesset. Quid autem habent admirationis, cum prope accesseris? Fortasse id optimum, sed ubi illud: Plus semper voluptatis? Nam illud vehementer repugnat, eundem beatum esse et multis malis oppressum.
Quod non faceret, si in voluptate summum bonum poneret. In his igitur partibus duabus nihil erat, quod Zeno commutare gestiret. Aliena dixit in physicis nec ea ipsa, quae tibi probarentur; Piso igitur hoc modo, vir optimus tuique, ut scis, amantissimus.
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Tu quidem reddes; Is es profecto tu. Nos commodius agimus. Duo Reges: constructio interrete. In quo etsi est magnus, tamen nova pleraque et perpauca de moribus. Et harum quidem rerum facilis est et expedita distinctio. Qui enim existimabit posse se miserum esse beatus non erit. Graecum enim hunc versum nostis omnes-: Suavis laborum est praeteritorum memoria. Ad corpus diceres pertinere-, sed ea, quae dixi, ad corpusne refers?
Quae cum magnifice primo dici viderentur, considerata minus probabantur. Non est igitur summum malum dolor. Sed erat aequius Triarium aliquid de dissensione nostra iudicare. Nemo nostrum istius generis asotos iucunde putat vivere. Graecum enim hunc versum nostis omnes-: Suavis laborum est praeteritorum memoria. Universa enim illorum ratione cum tota vestra confligendum puto.
Minime vero istorum quidem, inquit. An est aliquid per se ipsum flagitiosum, etiamsi nulla comitetur infamia? Sed tamen omne, quod de re bona dilucide dicitur, mihi praeclare dici videtur. Potius ergo illa dicantur: turpe esse, viri non esse debilitari dolore, frangi, succumbere. Quarum ambarum rerum cum medicinam pollicetur, luxuriae licentiam pollicetur. Nescio quo modo praetervolavit oratio. In quibus doctissimi illi veteres inesse quiddam caeleste et divinum putaverunt.
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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