Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
How the Endowment Effect Makes You Overvalue Your Possessions
In 1990, economists handed half a classroom of students a coffee mug and asked them to name a selling price. The others stated a buying price. Sellers demanded a median of $5.25; buyers offered just $2.25. That two-to-one gap is the endowment effect — our tendency to value what we own more than what we don't. This episode unpacks why ownership changes perceived value, from mug experiments to home sales, negotiations, and free trials. Learn how loss aversion and emotional attachment drive the effect, and how marketers exploit it with money-back guarantees and trial periods. We also share…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.