The endowment effect is a research finding that people are more likely to keep an object they own than obtain the same object that they do not own.
In valuation research, people want more money or value for something they own than they are willing to pay for the same object. This finding is true even when they have only been give the object a short while ago. What people are willing to pay is a variable called WTP or "Willingness to Pay."
The endowment effect may be related to the mere ownership effect. The mere ownership effect is the finding that people who randomly receive something and thus become owners place a higher value on the object than do people in the control condition who are not randomly assigned to receive the object.
An example of the endowment effect can be found in a study by psychologist, Daniel Kahneman and his colleagues.
The endowment effect was also mentioned in the book, Noise.Reference
Kahneman, D., Knetsch, J. L. & Thaler, R. H. (1990). Experimental Tests of the Endowment Effect and the Coase Theorem. Journal of Political Economy. 98 (6): 1325–1348. doi:10.1086/261737
Kahneman, D., Sibony, O., & Sunstein, C.R. (2021). Noise: A flaw in human judgment. New York: Hatchette.
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