Tags » Endowment Effect

Shop a Little, Save a Little - the Psychology of Saving Money

Behaviour Economics (“BC”) is an important topic when it comes to money, how we spend it, why we spend it, etc.

BC is applied to the study of classical economics – it’s the psychology behind the market. 495 more words

Personal Finance

Laws of Volutary Disclosure of Black Money, 2015 - too very Limp

The anti money laundering laws have come into effect. The voluntary period of compliance is set at 30th September. Those desirous of escaping punishment and prosecution have to declare their income, pay 30% as tax and a further 30% as penalty in return for immunity. 780 more words


Point of Equilibrium?

A point where opposing forces meet and show no tendency for change. That is how equilibrium is defined in all sciences.

In economics, is is the point where consumption and leisure, production and expenditure, demand and supply cross each other’s path. 338 more words


Endowment Effect and Wrenching Toughness

In behavioral economics, the ‘endowment effect’ states that individuals ascribe higher value to the objects they possess than to the objects they could secure. If this is true, then we are ‘loss averse’ creatures that prefer to keep what we have and are more disheartened by the loss of our possessions than by the gain of some other, perhaps more valuable item. 347 more words


Loss aversion vs. endowment effect

A better explanation of the endowment effect

It’s a famous study. Give a mug to a random subset of a group of people. Then ask those who got the mug (the sellers) to tell you the lowest price they’d sell the mug for, and ask those who didn’t get the mug (the buyers) to tell you the highest price they’d pay for the mug. 127 more words

Behavioral Economics

3 Mistakes to Avoid in Personal Finance

The combination of loss aversion with mindless choosing implies that if an option is designated as the “default,” it will attract a large market share. 566 more words


Why can't you get rid of all those Christmas presents?

Why more and more means less

Now that Christmas is a brandy-soaked memory, there comes the difficult business of packing away all the gifts that haven’t been broken or eaten. 128 more words

Behavioral Economics