Tags » Endowment Effect

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

Toughness

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

Articles

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

The World’s Most Expensive Dustbin

Julia Roberts is a superb actress. All too often, though, she headlines in movies whose themes I find uniquely unappealing. This means, when I do see her films, I have been dragged reluctantly to the cinema by my insistent other. 735 more words

Behavioural Living

Creating Systems: Asking The Right Questions, Toxic Relationships, And Loss Aversion

Systems make anything easy; they allow us to perform anything in the most efficient and effective way possible. More importantly, they allow even the ungifted and untalented to learn and perform with great ease. 381 more words

Blog Psychology Pt 3: The Mere Ownership Effect and the Endowment Effect

I love that name, don’t you? It makes it sound like it’s so insignificant–mere ownership, you know. I merely own this car, I merely own that book. 502 more words

Burrow & Sing