The Endowment Effect

The “endowment effect” is when we own something we begin to value it more than other people do. “One man’s ceiling is another man’s floor.” We fall in love with what we already have. We also focus on what we may lose rather than what we may gain. Finally, we assume that other people will see the transaction from the same perspective as we do. This is related and subset of the The Lake Wobegone Effect.