auction: Avoiding the Price Reduction Talk
- 05/04/18 07:08 AM
The Endowment Effect, sometimes called the Ownership Effect, is a psychological and behavioral economics principle that says people attribute a higher value to things they own simply because they own them. An excellent example of this effect in action is at rummage or yard sales. Instead of pricing something according to the actual market value an item may have, the item is instead priced higher simply because of the attachment the owner has to it.
Nobel Prize-winning economist Richard Thaler teamed up with two co-authors in a now-famous experiment detailing this exact phenomenon. In the experiment, the researchers gave half of … (0 comments)
The Endowment Effect, sometimes called the Ownership Effect, is a psychological and behavioral economics principle that says people attribute a higher value to things they own simply because they own them. An excellent example of this effect in action is at rummage or yard sales. Instead of pricing something according to the actual market value an item may have, the item is instead priced higher simply because of the attachment the owner has to it. 
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