What is endowment effect in personal finance?

The endowment effect is a behavioral bias in which people tend to value something more simply because they own it. Financially, that can make it harder to sell an investment, cancel an unused subscription or get rid of an expensive possession. One countermeasure is to ask: 'If I did not already own this, would I buy it today at this price?' That reframes the decision around current value instead of attachment.

Practical takeaway

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