Endowment Effect: Applying to Marketing, Stock, and Management

Abstract

This paper mainly focuses on the endowment effect and uses qualitative analysis and literature review to discuss and explain the endowment effect, and analyze the application of the endowment effect in sales, stock, and management. Through these three applications, we can have a good understanding of how the endowment effect works in our lives, which unconsciously influences a lot of our decisions. For some people, such as investors, the endowment effect influences them to make more correct and rational decisions. This paper also mentions some ways to suppress the endowment effect when making decisions. So in short, the endowment effect is a very common emotional bias, which will be explained in the following article.