Why stocks that you hold look so much better than all else, Devina Mehra explains
An American university did an experiment where it gave a set of students a coffee mug. A few days later, the same coffee mug was offered for purchase to other students. The ones who had to buy it, valued it at around $3 on average but the students who had the mug were not willing to sell it for less than $6-7. This is a classic example of the Endowment Effect or the Endowment Bias.
Other examples of the Endowment Effect include experiments which found that participants’ hypothetical selling price…
