Tag Archives: endowment effect

Jon Elster

Suppose you have been with a lover for a while, but that he or she decides to break off the relationship. Because of the contrast effect, there is an initial reaction of grief. You may then observe your mind play the following trick on you: To reduce the pain of separation, you redescribe your lover to yourself so that he or she appears much less attractive. This, obviously, is a case of sour grapes, or adaptive preference formation. You then notice, however, that the endowment effect is also affected. By degrading the other, you can no longer enjoy the memory of the good times you had together. In fact, you will feel like a fool thinking back on the relationship you had with an unworthy person. To restore the good memories you have to upvalue the other, but then of course the grief hits you again.

Jon Elster, Alchemies of the Mind: Rationality and the Emotions, Cambridge, 1999, pp. 32-33

Dan Ariely

Ownership is not limited to material things.  It can also apply to points of view.  Once we take ownership of an idea—whether it’s about politics or sports—what do we do?  We love it perhaps more than we should.  We prize it more than it is worth.  And most frequently, we have trouble letting go of it because we can’t stand the idea of its loss.  What are we left with then?  An ideology—rigid and unyielding.

Dan Ariely, Predictably Irrational: The Hidden Forces that Shape Our Decisions, New York, 2008, pp. 138-139