We tend to overvalue what we already own from "summary" of Predictably Irrational, Revised by Dan Ariely
Consider the following scenario: you are in possession of a concert ticket that you bought for $100. You suddenly find out that the concert is not as appealing as you originally thought. Now, if someone offers you $80 for the ticket, you might hesitate to sell it. Why is that?It turns out that we have a tendency to overvalue what we already own. This phenomenon is known as the endowment effect. Once we possess something, we attach a higher value to it than we did before we acquired it. This is why you might feel reluctant to part with your concert ticket for $80, even though you wouldn't have paid that much for it if you didn't already own it. The endowment effect is a powerful force that influences our decision-making processes. It can lead us to make irrational choices based on our emotional attachment...
Similar Posts
Challenge yourself to think beyond your comfort zone
When faced with new or challenging situations, our brains often default to familiar patterns of thinking. This is because our b...
Cash and cash equivalents offer liquidity and stability
Cash and cash equivalents play a crucial role in an investment portfolio due to their ability to provide liquidity and stabilit...
Leveraging reciprocity can drive action
Reciprocity is a powerful force in human interaction. When someone does something for us, we feel a strong urge to return the f...
Groupthink can lead to flawed decisions
Groupthink occurs when a group's desire for harmony and conformity overrides its ability to make rational decisions. In such si...
Live a life that honors and glorifies God
To live a life that honors and glorifies God means that every aspect of our existence is oriented towards Him. It means being f...
Familiarity bias leads investors to favor investments they are familiar with
One of the most common biases that plague investors is the tendency to favor investments that they are familiar with. This fami...
Take calculated risks to grow your wealth
To achieve financial success, one must be willing to take calculated risks. Risks are inherent in any investment opportunity, b...
Decluttering physical possessions can help declutter mental stress
In the midst of a cluttered and chaotic environment, it is easy to feel overwhelmed and stressed. Our physical possessions have...
A mentalidade de abundância transforma a realidade financeira
The concept that abundance mindset transforms financial reality is a powerful one that can shift your entire approach to money....
Understanding human psychology is essential
To effectively persuade others, it is crucial to have a deep understanding of human psychology. Without this knowledge, our eff...
