The Endowment Effect

The Endowment Effect is a psychological phenomenon where people assign more value to items they own compared to identical items they do not own. This bias can lead individuals to overprice their possessions, making them less willing to sell or trade. For example, if you receive a mug as a gift, you might value it more than if you saw the same mug in a store. This effect illustrates how ownership can influence our perception of value, often causing us to hold onto things longer than is rational.