Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
The Endowment Effect Why You Overvalue What You Own
Why do we ask more to sell a coffee mug than we'd pay to buy it? In this episode, Lucas and Luna explore the endowment effect—the behavioral bias that makes us value what we own more than identical objects we don't. They break down the classic 1990 Kahneman, Knetsch, and Thaler mug experiment, where half the students given a mug demanded roughly double what the other half offered to buy it. They discuss how loss aversion and ownership pride inflate prices, how this skews real-world decisions from real estate listing prices to stock trading, and why companies like IKEA and car…
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