Impact of Endowment Effect on Customer Purchasing Behaviour

An instance known as the endowment effect occurs when someone values an item they currently possess more highly than they would if they did not own it. Things that are emotionally or symbolically significant to an individual can be a good example of the endowment effect. "Ownership" and "loss aversion" have been found to be the two primary psychological factors driving the endowment effect. Companies frequently attempt to capitalize on this cognitive bias in marketing, which is closely related to the endowment effect. If investors have a well-defined investment strategy that includes a timetable for selling particular investments, they can mitigate the endowment effect. This article focuses on exploring the facts, and importance of the endowment effect on purchases and sales as well.