Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
The Endowment Effect and Orson Welles as Proof
Lucas and Luna dive into the endowment effect, the behavioral bias that makes us overvalue what we already own. They anchor the discussion with a famous case from 1960: Orson Welles paying more to keep a wine collection he barely drank than a dispassionate buyer would. They unpack the psychology behind the effect, its roots in loss aversion, and how marketers exploit it with 'free trials' and 'money-back guarantees.' Specific numbers include a 2x valuation gap between sellers and buyers in classic mug experiments. They also discuss how the effect warps everything from…
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