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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.
Facile est hoc cernere in primis puerorum aetatulis. Cum autem negant ea quicquam ad beatam vitam pertinere, rursus naturam relinquunt. Haec quo modo conveniant, non sane intellego. Laboro autem non sine causa; Aliam vero vim voluptatis esse, aliam nihil dolendi, nisi valde pertinax fueris, concedas necesse est. Si verbum sequimur, primum longius verbum praepositum quam bonum.
Quis suae urbis conservatorem Codrum, quis Erechthei filias non maxime laudat? Hoc mihi cum tuo fratre convenit. Deinde prima illa, quae in congressu solemus: Quid tu, inquit, huc? Non igitur bene. Portenta haec esse dicit, neque ea ratione ullo modo posse vivi; Sed quid ages tandem, si utilitas ab amicitia, ut fit saepe, defecerit? An ea, quae per vinitorem antea consequebatur, per se ipsa curabit?
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. At ille non pertimuit saneque fidenter: Istis quidem ipsis verbis, inquit; Tum Piso: Quoniam igitur aliquid omnes, quid Lucius noster? At hoc in eo M. Quod cum accidisset ut alter alterum necopinato videremus, surrexit statim. Duo Reges: constructio interrete. Quis contra in illa aetate pudorem, constantiam, etiamsi sua nihil intersit, non tamen diligat? Quantum Aristoxeni ingenium consumptum videmus in musicis? Quid igitur dubitamus in tota eius natura quaerere quid sit effectum? Maximus dolor, inquit, brevis est. Mihi, inquam, qui te id ipsum rogavi? Pauca mutat vel plura sane; Non autem hoc: igitur ne illud quidem.
Obsecro, inquit, Torquate, haec dicit Epicurus? Habent enim et bene longam et satis litigiosam disputationem. Et ais, si una littera commota sit, fore tota ut labet disciplina. Sunt enim quasi prima elementa naturae, quibus ubertas orationis adhiberi vix potest, nec equidem eam cogito consectari. Equidem soleo etiam quod uno Graeci, si aliter non possum, idem pluribus verbis exponere. Nunc dicam de voluptate, nihil scilicet novi, ea tamen, quae te ipsum probaturum esse confidam. An me, inquam, nisi te audire vellem, censes haec dicturum fuisse?
Vitiosum est enim in dividendo partem in genere numerare. Quis istud possit, inquit, negare? Iam in altera philosophiae parte. Ergo hoc quidem apparet, nos ad agendum esse natos. Est autem officium, quod ita factum est, ut eius facti probabilis ratio reddi possit. Immo istud quidem, inquam, quo loco quidque, nisi iniquum postulo, arbitratu meo. Quibus natura iure responderit non esse verum aliunde finem beate vivendi, a se principia rei gerendae peti; Atqui eorum nihil est eius generis, ut sit in fine atque extrerno bonorum.
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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