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Placeholder Lesson:
** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
The endowment effect is the tendency to place a higher value on things we already own.
People often demand more to give something up than they would pay to acquire it.
This bias arises because ownership creates emotional attachment.
It can cause irrational decisions, such as refusing to sell something even when it’s overpriced.
The endowment effect shows how feelings of possession influence perceived value.