Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
The Endowment Effect Why We Overvalue What We Own
In episode 5 of Behavioral Economics with Fexingo, Lucas and Luna dive into the endowment effect — the cognitive bias that makes us value things more simply because we own them. Anchoring around a famous 1990 experiment by Nobel laureate Richard Thaler, they explore why a coffee mug given to half a classroom suddenly becomes worth more than cash to its new owner. Lucas explains how this bias distorts everything from housing markets (homeowners pricing their houses above market) to corporate divestitures (managers hoarding underperforming divisions). Luna pushes back on whether the effect is…
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