No, it's not just you — we all tend to overestimate the value of our possessions, and there's a name for it.
Hic ego: Pomponius quidem, inquam, noster iocari videtur, et fortasse suo iure. Quam ob rem tandem, inquit, non satisfacit? Quae fere omnia appellantur uno ingenii nomine, easque virtutes qui habent, ingeniosi vocantur. Sed quid minus probandum quam esse aliquem beatum nec satis beatum? Itaque quantum adiit periculum! ad honestatem enim illum omnem conatum suum referebat, non ad voluptatem. Hoc Hieronymus summum bonum esse dixit. Tria genera bonorum;
Ut nemo dubitet, eorum omnia officia quo spectare, quid sequi, quid fugere debeant? Cenasti in vita numquam bene, cum omnia in ista Consumis squilla atque acupensere cum decimano. Quo modo autem philosophus loquitur? Paulum, cum regem Persem captum adduceret, eodem flumine invectio? Qui autem diffidet perpetuitati bonorum suorum, timeat necesse est, ne aliquando amissis illis sit miser. Si stante, hoc natura videlicet vult, salvam esse se, quod concedimus; Nihil minus, contraque illa hereditate dives ob eamque rem laetus. Ergo id est convenienter naturae vivere, a natura discedere. Quid enim? Paria sunt igitur.
- Be mindful of the endowment heuristic in sales conversations.
When purchasing something, be aware ...
Lorem ipsum dolor sit amet, consectetur adipiscing elit. An ea, quae per vinitorem antea consequebatur, per se ipsa curabit? Haec et tu ita posuisti, et verba vestra sunt. Haec para/doca illi, nos admirabilia dicamus. Erit enim mecum, si tecum erit. Comprehensum, quod cognitum non habet? Duo Reges: constructio interrete.
Deinde prima illa, quae in congressu solemus: Quid tu, inquit, huc? Quis negat? Ait enim se, si uratur, Quam hoc suave! dicturum. Cuius ad naturam apta ratio vera illa et summa lex a philosophis dicitur. Dolere malum est: in crucem qui agitur, beatus esse non potest. Inde igitur, inquit, ordiendum est.
Non enim iam stirpis bonum quaeret, sed animalis. Bork Te enim iudicem aequum puto, modo quae dicat ille bene noris. Sint ista Graecorum; Quae diligentissime contra Aristonem dicuntur a Chryippo. Sed emolumenta communia esse dicuntur, recte autem facta et peccata non habentur communia. Hoc sic expositum dissimile est superiori. Quid de Pythagora? Sin te auctoritas commovebat, nobisne omnibus et Platoni ipsi nescio quem illum anteponebas? Similiter sensus, cum accessit ad naturam, tuetur illam quidem, sed etiam se tuetur; Quod idem cum vestri faciant, non satis magnam tribuunt inventoribus gratiam.
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.’
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