“When we own goods, we value them higher than when we don’t”
How we value items depends on whether or not it is ours. The effect (also known as ‘divestiture aversion’) is that when there are two identical products, we especially value the one we own.
In other words: we want more money if we sell a product than what we are willing to pay when buying it.
Scientific research example:
The prototypical studies into the endowment effect involve mugs and other equally priced products.
Imagine Nobel-prize winner Daniel Kahneman gives you such a mug. You say “thank you”. Daniel then asks you if you want to trade ‘your mug’ for any other goods. Typically you’d want twice the money for the product he gave to you than you would for a product he didn’t…
Behavioral economics guru Dan Ariely did a similar study involving a lottery with tickets for the NCAA final. He found that his students were asking 14 times more for the ticket when they won it than they were willing to pay for a ticket in the first place.