We have a mirror that has been resting against the wall in our garage for the last five years. I want to give it away, but my wife Lorraine keeps saying, “No, we’ll sell that. It’s a nice mirror.”

It is a lovely mirror. But we aren’t going to get that much for it. Still, there it sits.

Lorraine is demonstrating how the Endowment Effect works. We discussed the significance of the Endowment Effect in a recent podcast. The Endowment Effect is a concept in Behavioral Economics that refers to how people value things highly that they possess simply because it is theirs, and even when others do not. The Endowment Effect can significantly affect your customer-driven growth on both sides of the customer and brand equation.

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