# Endowment Effect

*Behavioral Finance — Finicade finance glossary*

The endowment effect is valuing something more highly simply because you own it. In the classic experiment, people given a mug demanded roughly twice what other people were willing to pay for it. In portfolios it shows up as reluctance to sell inherited holdings or employer stock, and the useful test is direct: if you didn't own this, would you buy it today at this price?

**Also known as:** ownership bias, divestiture aversion

**Related terms:** [Loss Aversion](https://finicade.com/glossary/loss-aversion), [Disposition Effect](https://finicade.com/glossary/disposition-effect), [Status Quo Bias](https://finicade.com/glossary/status-quo-bias), [Behavioral Biases](https://finicade.com/glossary/behavioral-biases), [Anchoring](https://finicade.com/glossary/anchoring)

Source: https://finicade.com/glossary/endowment-effect