Endowment Effect

The tendency to overvalue something simply because you own it.

Ownership creates an emotional attachment. Once we possess something, losing it feels like a loss — triggering loss aversion — so we demand more to give it up than we'd pay to acquire it.

• Pricing your used car higher than its market value because 'it's special to you.'
• Refusing to trade a coffee mug you were given, even for something objectively better.
• Homeowners overpricing their house because of sentimental attachment.

• Imagine you don't own the item — would you buy it at the price you're asking?
• Get objective valuations from others before setting prices.
• Separate emotional value from market value in transactions.
• Practice letting go of possessions periodically to weaken the attachment.