Why do we value items more if they belong to us?
Endowment Effect
, explained.What is the Endowment Effect?
The endowment effect describes how people tend to value items that they own more highly than they would if they did not belong to them. This means that sellers often try to charge more for an item than it would cost elsewhere.
Where this bias occurs
Let’s say a few months ago, you bought a concert ticket for $100. You just found out that you won’t be able to make it to the concert after all, so you decide to resell your ticket. You price the ticket at $150, because just selling it at market value would feel like you were losing out.