Endowment effect

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This article gives a basic definition in behavioral economics.
View a complete list of basic definitions in behavioral economics

Definition

The endowment effect is an effect whereby the value a person places on a good is greater if the person owns a good, i.e., if a property right to the good is established. The endowment effect is often measured in terms of a WTA/WTP gap: a gap between the money the person is Willing To Accept (WTA) to sell the good, and the money the person is Willing To Pay (WTP) to acquire the good.

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