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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.
Manebit ergo amicitia tam diu, quam diu sequetur utilitas, et, si utilitas amicitiam constituet, tollet eadem. Legimus tamen Diogenem, Antipatrum, Mnesarchum, Panaetium, multos alios in primisque familiarem nostrum Posidonium. Ego vero isti, inquam, permitto. Istic sum, inquit. Post enim Chrysippum eum non sane est disputatum. Sextilio Rufo, cum is rem ad amicos ita deferret, se esse heredem Q. Nam si propter voluptatem, quae est ista laus, quae possit e macello peti? Beatus sibi videtur esse moriens. Quae in controversiam veniunt, de iis, si placet, disseramus. Istam voluptatem, inquit, Epicurus ignorat?
Comprehensum, quod cognitum non habet? Ita nemo beato beatior. Semper enim ita adsumit aliquid, ut ea, quae prima dederit, non deserat. Et si turpitudinem fugimus in statu et motu corporis, quid est cur pulchritudinem non sequamur?
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sapiens autem semper beatus est et est aliquando in dolore; Gracchum patrem non beatiorem fuisse quam fillum, cum alter stabilire rem publicam studuerit, alter evertere. Suo enim quisque studio maxime ducitur. Sedulo, inquam, faciam. Dici enim nihil potest verius. Et quidem iure fortasse, sed tamen non gravissimum est testimonium multitudinis.
Qui-vere falsone, quaerere mittimus-dicitur oculis se privasse; Et quidem iure fortasse, sed tamen non gravissimum est testimonium multitudinis. Diodorus, eius auditor, adiungit ad honestatem vacuitatem doloris. Earum etiam rerum, quas terra gignit, educatio quaedam et perfectio est non dissimilis animantium. Cum autem in quo sapienter dicimus, id a primo rectissime dicitur.
Si enim, ut mihi quidem videtur, non explet bona naturae voluptas, iure praetermissa est; Duo Reges: constructio interrete. Quae est igitur causa istarum angustiarum? Quamquam ab iis philosophiam et omnes ingenuas disciplinas habemus;
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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