Real Estate

Endowment Bias – What Is The Real Value Of The Assets In Your Portfolio?

by posted 3years ago 164 views
Endowment bias is an emotional bias in which people value an asset more when they actually own it than when they do not. Endowment bias is inconsistent with standard economic theory, which asserts that the price a person is willing to pay for a good should equal the price at which that person would be willing to sell the same good. However, psychologists have found that when asked, people tend to state minimum selling prices for an asset that exceed minimum purchase prices. Effectively, ownership ‘endows’ the asset with added value.

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