The Endowment Effect

Abstract: Shopping for and owning things are exciting and emotional experiences. We take time and energy thinking about what to buy and the role it will play in our lives. In this Page One Economics: Focus on Finance article, we look at the endowment effect—how we place more value on items we own than on items we don’t.

Keywords: endowment effect; loss aversion; opportunity cost; sunk cost;

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Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Page One Economics Newsletter

Publication Date: 2022-04